Correlation Between Bpost NV and Proximus

Can any of the company-specific risk be diversified away by investing in both Bpost NV and Proximus 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 Bpost NV and Proximus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bpost NV and Proximus NV, you can compare the effects of market volatilities on Bpost NV and Proximus 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 Bpost NV with a short position of Proximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bpost NV and Proximus.

Diversification Opportunities for Bpost NV and Proximus

0.57

Correlation Coefficient

Bpost NV  Proximus

Very weak diversification

The 3 months correlation between Bpost and Proximus is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and Proximus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus NV and Bpost 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 Bpost NV are associated (or correlated) with Proximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximus NV has no effect on the direction of Bpost NV i.e., Bpost NV and Proximus go up and down completely randomly.

Pair Corralation between Bpost NV and Proximus

Assuming the 90 days trading horizon Bpost NV is expected to under-perform the Proximus. In addition to that, Bpost NV is 1.38 times more volatile than Proximus NV. It trades about -0.21 of its total potential returns per unit of risk. Proximus NV is currently generating about -0.1 per unit of volatility. If you would invest  680.00  in Proximus NV on September 3, 2024 and sell it today you would lose (67.00) from holding Proximus NV or give up 9.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bpost NV  vs.  Proximus NV

Bpost NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bpost NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Proximus NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proximus NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Bpost NV and Proximus

The main advantage of trading using opposite Bpost NV and Proximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bpost NV position performs unexpectedly, Proximus 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 Proximus will offset losses from the drop in Proximus' long position.

The idea behind Bpost NV and Proximus NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.