Correlation Between VGP NV and Ontex Group
Can any of the company-specific risk be diversified away by investing in both VGP NV and Ontex Group 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 Ontex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGP NV and Ontex Group NV, you can compare the effects of market volatilities on VGP NV and Ontex Group 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGP NV and Ontex Group.
Diversification Opportunities for VGP NV and Ontex Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VGP and Ontex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of VGP NV i.e., VGP NV and Ontex Group go up and down completely randomly.
Pair Corralation between VGP NV and Ontex Group
Assuming the 90 days trading horizon VGP NV is expected to generate 1.98 times less return on investment than Ontex Group. In addition to that, VGP NV is 1.25 times more volatile than Ontex Group NV. It trades about 0.01 of its total potential returns per unit of risk. Ontex Group NV is currently generating about 0.03 per unit of volatility. If you would invest 649.00 in Ontex Group NV on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Ontex Group NV or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGP NV vs. Ontex Group NV
Performance |
| Timeline |
| VGP NV |
| Ontex Group NV |
VGP NV and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGP NV and Ontex Group
The main advantage of trading using opposite VGP NV and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGP NV position performs unexpectedly, Ontex Group 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 Ontex Group will offset losses from the drop in Ontex Group'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 |
| Ontex Group vs. Brederode SA | Ontex Group vs. Compagnie du Bois | Ontex Group vs. Ackermans Van Haaren | Ontex Group vs. Sofina Socit Anonyme |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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