Correlation Between Brouwerij Handelsmaatschap and Viohalco

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

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

Diversification Opportunities for Brouwerij Handelsmaatschap and Viohalco

-0.14

Correlation Coefficient

Brouwerij Handelsmaatschap  Viohalco

Good diversification

The 3 months correlation between Brouwerij and Viohalco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brouwerij Handelsmaatschappij and Viohalco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viohalco SA and Brouwerij Handelsmaatschap 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 Brouwerij Handelsmaatschappij NV 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 Brouwerij Handelsmaatschap i.e., Brouwerij Handelsmaatschap and Viohalco go up and down completely randomly.

Pair Corralation between Brouwerij Handelsmaatschap and Viohalco

Assuming the 90 days trading horizon Brouwerij Handelsmaatschappij NV is expected to generate 1.61 times more return on investment than Viohalco. However, Brouwerij Handelsmaatschap is 1.61 times more volatile than Viohalco SA. It trades about -0.02 of its potential returns per unit of risk. Viohalco SA is currently generating about -0.06 per unit of risk. If you would invest  160,000  in Brouwerij Handelsmaatschappij NV on September 23, 2024 and sell it today you would lose (8,000) from holding Brouwerij Handelsmaatschappij NV or give up 5.0% of portfolio value over 90 days.

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

Brouwerij Handelsmaatschappij   vs.  Viohalco SA

Brouwerij Handelsmaatschap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brouwerij Handelsmaatschappij NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Brouwerij Handelsmaatschap is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Viohalco SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viohalco SA 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 Brouwerij Handelsmaatschap and Viohalco

The main advantage of trading using opposite Brouwerij Handelsmaatschap and Viohalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brouwerij Handelsmaatschap 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.

The idea behind Brouwerij Handelsmaatschappij NV and Viohalco 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.