Correlation Between Vastned Retail and Global Fashion
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Global Fashion 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 Global Fashion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Global Fashion Group, you can compare the effects of market volatilities on Vastned Retail and Global Fashion 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 Global Fashion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Global Fashion.
Diversification Opportunities for Vastned Retail and Global Fashion
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vastned and Global is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Global Fashion Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fashion Group 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 NV are associated (or correlated) with Global Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fashion Group has no effect on the direction of Vastned Retail i.e., Vastned Retail and Global Fashion go up and down completely randomly.
Pair Corralation between Vastned Retail and Global Fashion
Assuming the 90 days horizon Vastned Retail NV is expected to generate 0.18 times more return on investment than Global Fashion. However, Vastned Retail NV is 5.46 times less risky than Global Fashion. It trades about 0.05 of its potential returns per unit of risk. Global Fashion Group is currently generating about -0.01 per unit of risk. If you would invest 1,655 in Vastned Retail NV on September 5, 2024 and sell it today you would earn a total of 620.00 from holding Vastned Retail NV or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Vastned Retail NV vs. Global Fashion Group
Performance |
| Timeline |
| Vastned Retail NV |
| Global Fashion Group |
Vastned Retail and Global Fashion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Global Fashion
The main advantage of trading using opposite Vastned Retail and Global Fashion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Global Fashion 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 Global Fashion will offset losses from the drop in Global Fashion's long position.| Vastned Retail vs. Link Real Estate | Vastned Retail vs. Kimco Realty | Vastned Retail vs. Range Resources Corp | Vastned Retail vs. Vicinity Centres |
| Global Fashion vs. BURLINGTON STORES | Global Fashion vs. FLOW TRADERS LTD | Global Fashion vs. Vastned Retail NV | Global Fashion vs. Fast Retailing Co |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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