Correlation Between Vastned Retail and Carsales
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on Vastned Retail and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Carsales.
Diversification Opportunities for Vastned Retail and Carsales
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vastned and Carsales is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of Vastned Retail i.e., Vastned Retail and Carsales go up and down completely randomly.
Pair Corralation between Vastned Retail and Carsales
Assuming the 90 days horizon Vastned Retail is expected to generate 16.32 times less return on investment than Carsales. But when comparing it to its historical volatility, Vastned Retail NV is 1.74 times less risky than Carsales. It trades about 0.04 of its potential returns per unit of risk. Carsales is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 2,280 in Carsales on September 3, 2024 and sell it today you would earn a total of 260.00 from holding Carsales or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Carsales
Performance |
| Timeline |
| Vastned Retail NV |
| Carsales |
Vastned Retail and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Carsales
The main advantage of trading using opposite Vastned Retail and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Vastned Retail vs. NXP Semiconductors NV | Vastned Retail vs. Elmos Semiconductor SE | Vastned Retail vs. PLAYTIKA HOLDING DL 01 | Vastned Retail vs. COLUMBIA SPORTSWEAR |
| Carsales vs. Thai Beverage Public | Carsales vs. Premier Foods PLC | Carsales vs. Food Life Companies | Carsales vs. CN MODERN DAIRY |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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