Correlation Between BEL Small and Viohalco
Can any of the company-specific risk be diversified away by investing in both BEL Small and Viohalco 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 BEL Small and Viohalco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and Viohalco SA, you can compare the effects of market volatilities on BEL Small and Viohalco 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 BEL Small with a short position of Viohalco. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Viohalco.
Diversification Opportunities for BEL Small and Viohalco
Poor diversification
The 3 months correlation between BEL and Viohalco is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Viohalco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viohalco SA and BEL Small 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 BEL Small are associated (or correlated) with Viohalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viohalco SA has no effect on the direction of BEL Small i.e., BEL Small and Viohalco go up and down completely randomly.
Pair Corralation between BEL Small and Viohalco
Assuming the 90 days trading horizon BEL Small is expected to under-perform the Viohalco. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 2.86 times less risky than Viohalco. The index trades about -0.27 of its potential returns per unit of risk. The Viohalco SA is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 583.00 in Viohalco SA on September 24, 2024 and sell it today you would lose (56.00) from holding Viohalco SA or give up 9.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BEL Small vs. Viohalco SA
Performance |
Timeline |
BEL Small and Viohalco Volatility Contrast
Predicted Return Density |
Returns |
BEL Small
Pair trading matchups for BEL Small
Viohalco SA
Pair trading matchups for Viohalco
Pair Trading with BEL Small and Viohalco
The main advantage of trading using opposite BEL Small and Viohalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Viohalco 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 Viohalco will offset losses from the drop in Viohalco's long position.BEL Small vs. Retail Estates | BEL Small vs. Home Invest Belgium | BEL Small vs. Vastned Retail Belgium | BEL Small vs. Keyware Technologies NV |
Viohalco vs. Cenergy Holdings SA | Viohalco vs. Van de Velde | Viohalco vs. NV Bekaert SA | Viohalco vs. Econocom Group SANV |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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