Correlation Between Van De and GIMV NV
Can any of the company-specific risk be diversified away by investing in both Van De and GIMV NV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Van De and GIMV NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Van de Velde and GIMV NV, you can compare the effects of market volatilities on Van De and GIMV NV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Van De with a short position of GIMV NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Van De and GIMV NV.
Diversification Opportunities for Van De and GIMV NV
Good diversification
The 3 months correlation between Van and GIMV is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Van de Velde and GIMV NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIMV NV and Van De is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Van de Velde are associated (or correlated) with GIMV NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIMV NV has no effect on the direction of Van De i.e., Van De and GIMV NV go up and down completely randomly.
Pair Corralation between Van De and GIMV NV
Assuming the 90 days trading horizon Van de Velde is expected to generate 1.09 times more return on investment than GIMV NV. However, Van De is 1.09 times more volatile than GIMV NV. It trades about 0.01 of its potential returns per unit of risk. GIMV NV is currently generating about 0.01 per unit of risk. If you would invest 2,746 in Van de Velde on September 3, 2024 and sell it today you would earn a total of 154.00 from holding Van de Velde or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Van de Velde vs. GIMV NV
Performance |
| Timeline |
| Van de Velde |
| GIMV NV |
Van De and GIMV NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Van De and GIMV NV
The main advantage of trading using opposite Van De and GIMV NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Van De position performs unexpectedly, GIMV NV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GIMV NV will offset losses from the drop in GIMV NV's long position.| Van De vs. EVS Broadcast Equipment | Van De vs. NV Bekaert SA | Van De vs. Tessenderlo | Van De vs. Melexis NV |
| GIMV NV vs. Brederode SA | GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Sofina Socit Anonyme | GIMV NV vs. Ackermans Van Haaren |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |