Correlation Between Brunel International and Wereldhave

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

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

Diversification Opportunities for Brunel International and Wereldhave

0.1

Correlation Coefficient

Brunel International  Wereldhave

Average diversification

The 3 months correlation between Brunel and Wereldhave is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Brunel International NV and Wereldhave NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhave NV and Brunel International 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 Brunel International NV are associated (or correlated) with Wereldhave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhave NV has no effect on the direction of Brunel International i.e., Brunel International and Wereldhave go up and down completely randomly.

Pair Corralation between Brunel International and Wereldhave

Assuming the 90 days trading horizon Brunel International NV is expected to generate 1.6 times more return on investment than Wereldhave. However, Brunel International is 1.6 times more volatile than Wereldhave NV. It trades about 0.0 of its potential returns per unit of risk. Wereldhave NV is currently generating about -0.16 per unit of risk. If you would invest  880.00  in Brunel International NV on September 19, 2024 and sell it today you would lose (7.00) from holding Brunel International NV or give up 0.8% of portfolio value over 90 days.

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

Brunel International NV  vs.  Wereldhave NV

Brunel International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunel International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Brunel International is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Wereldhave NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wereldhave NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Brunel International and Wereldhave

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

The idea behind Brunel International NV and Wereldhave 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.