Correlation Between VGP NV and Celyad SA
Can any of the company-specific risk be diversified away by investing in both VGP NV and Celyad SA 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 VGP NV and Celyad SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGP NV and Celyad SA, you can compare the effects of market volatilities on VGP NV and Celyad SA 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 VGP NV with a short position of Celyad SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGP NV and Celyad SA.
Diversification Opportunities for VGP NV and Celyad SA
Excellent diversification
The 3 months correlation between VGP and Celyad is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Celyad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celyad SA and VGP NV 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 VGP NV are associated (or correlated) with Celyad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celyad SA has no effect on the direction of VGP NV i.e., VGP NV and Celyad SA go up and down completely randomly.
Pair Corralation between VGP NV and Celyad SA
Assuming the 90 days trading horizon VGP NV is expected to generate 7.85 times less return on investment than Celyad SA. But when comparing it to its historical volatility, VGP NV is 4.37 times less risky than Celyad SA. It trades about 0.01 of its potential returns per unit of risk. Celyad SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Celyad SA on August 30, 2024 and sell it today you would lose (37.00) from holding Celyad SA or give up 35.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGP NV vs. Celyad SA
Performance |
| Timeline |
| VGP NV |
| Celyad SA |
VGP NV and Celyad SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGP NV and Celyad SA
The main advantage of trading using opposite VGP NV and Celyad SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGP NV position performs unexpectedly, Celyad SA 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 Celyad SA will offset losses from the drop in Celyad SA's long position.| VGP NV vs. Warehouses de Pauw | VGP NV vs. Sofina Socit Anonyme | VGP NV vs. Aedifica | VGP NV vs. Xior Student Housing |
| Celyad SA vs. Onward Medical NV | Celyad SA vs. Ion Beam Applications | Celyad SA vs. Keyware Technologies NV |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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