Correlation Between Vastned Retail and Aedifica
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Aedifica 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 Vastned Retail and Aedifica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail Belgium and Aedifica, you can compare the effects of market volatilities on Vastned Retail and Aedifica 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 Vastned Retail with a short position of Aedifica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Aedifica.
Diversification Opportunities for Vastned Retail and Aedifica
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vastned and Aedifica is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail Belgium and Aedifica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica and Vastned Retail 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 Vastned Retail Belgium are associated (or correlated) with Aedifica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedifica has no effect on the direction of Vastned Retail i.e., Vastned Retail and Aedifica go up and down completely randomly.
Pair Corralation between Vastned Retail and Aedifica
Assuming the 90 days trading horizon Vastned Retail Belgium is expected to generate 1.21 times more return on investment than Aedifica. However, Vastned Retail is 1.21 times more volatile than Aedifica. It trades about 0.02 of its potential returns per unit of risk. Aedifica is currently generating about -0.01 per unit of risk. If you would invest 2,462 in Vastned Retail Belgium on September 12, 2024 and sell it today you would earn a total of 278.00 from holding Vastned Retail Belgium or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vastned Retail Belgium vs. Aedifica
Performance |
| Timeline |
| Vastned Retail Belgium |
| Aedifica |
Vastned Retail and Aedifica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Aedifica
The main advantage of trading using opposite Vastned Retail and Aedifica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Aedifica 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 Aedifica will offset losses from the drop in Aedifica's long position.| Vastned Retail vs. Retail Estates | Vastned Retail vs. Home Invest Belgium | Vastned Retail vs. Exmar NV | Vastned Retail vs. Iep Invest |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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