Correlation Between Campine and Cofinimmo

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

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

Diversification Opportunities for Campine and Cofinimmo

-0.63

Correlation Coefficient

Campine  Cofinimmo

Excellent diversification

The 3 months correlation between Campine and Cofinimmo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Campine and Cofinimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofinimmo SA and Campine 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 Campine are associated (or correlated) with Cofinimmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofinimmo SA has no effect on the direction of Campine i.e., Campine and Cofinimmo go up and down completely randomly.

Pair Corralation between Campine and Cofinimmo

Assuming the 90 days trading horizon Campine is expected to generate 1.51 times more return on investment than Cofinimmo. However, Campine is 1.51 times more volatile than Cofinimmo SA. It trades about 0.21 of its potential returns per unit of risk. Cofinimmo SA is currently generating about -0.26 per unit of risk. If you would invest  8,000  in Campine on September 12, 2024 and sell it today you would earn a total of  1,900  from holding Campine or generate 23.75% return on investment over 90 days.

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

Campine  vs.  Cofinimmo SA

Campine

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Campine are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Campine reported solid returns over the last few months and may actually be approaching a breakup point.

Cofinimmo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cofinimmo SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Campine and Cofinimmo

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

The idea behind Campine and Cofinimmo SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.