Correlation Between Warehouses and Elia Group
Can any of the company-specific risk be diversified away by investing in both Warehouses and Elia 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 Warehouses and Elia Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Warehouses de Pauw and Elia Group SANV, you can compare the effects of market volatilities on Warehouses and Elia 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 Warehouses with a short position of Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Warehouses and Elia Group.
Diversification Opportunities for Warehouses and Elia Group
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Warehouses and Elia is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Warehouses de Pauw and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV and Warehouses 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 Warehouses de Pauw are associated (or correlated) with Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Warehouses i.e., Warehouses and Elia Group go up and down completely randomly.
Pair Corralation between Warehouses and Elia Group
Assuming the 90 days trading horizon Warehouses de Pauw is expected to generate 0.87 times more return on investment than Elia Group. However, Warehouses de Pauw is 1.15 times less risky than Elia Group. It trades about -0.18 of its potential returns per unit of risk. Elia Group SANV is currently generating about -0.26 per unit of risk. If you would invest 2,040 in Warehouses de Pauw on September 18, 2024 and sell it today you would lose (114.00) from holding Warehouses de Pauw or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Warehouses de Pauw vs. Elia Group SANV
Performance |
| Timeline |
| Warehouses de Pauw |
| Elia Group SANV |
Warehouses and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Warehouses and Elia Group
The main advantage of trading using opposite Warehouses and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Warehouses position performs unexpectedly, Elia 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 Elia Group will offset losses from the drop in Elia Group's long position.| Warehouses vs. Montea CVA | Warehouses vs. Warehouses Estates Belgium | Warehouses vs. Exmar NV | Warehouses vs. Iep Invest |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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