Correlation Between Vastned Retail and Sofina Socit
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Sofina Socit 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 Sofina Socit 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 Sofina Socit Anonyme, you can compare the effects of market volatilities on Vastned Retail and Sofina Socit 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 Sofina Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Sofina Socit.
Diversification Opportunities for Vastned Retail and Sofina Socit
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vastned and Sofina is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail Belgium and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme 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 Sofina Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Vastned Retail i.e., Vastned Retail and Sofina Socit go up and down completely randomly.
Pair Corralation between Vastned Retail and Sofina Socit
Assuming the 90 days trading horizon Vastned Retail Belgium is expected to under-perform the Sofina Socit. In addition to that, Vastned Retail is 1.24 times more volatile than Sofina Socit Anonyme. It trades about -0.08 of its total potential returns per unit of risk. Sofina Socit Anonyme is currently generating about 0.07 per unit of volatility. If you would invest 23,080 in Sofina Socit Anonyme on October 24, 2024 and sell it today you would earn a total of 1,200 from holding Sofina Socit Anonyme or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail Belgium vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Vastned Retail Belgium |
| Sofina Socit Anonyme |
Vastned Retail and Sofina Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Sofina Socit
The main advantage of trading using opposite Vastned Retail and Sofina Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Sofina Socit 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 Sofina Socit will offset losses from the drop in Sofina Socit's long position.| Vastned Retail vs. Wereldhav B Sicafi | Vastned Retail vs. Retail Estates | Vastned Retail vs. Home Invest Belgium |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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