Correlation Between Deceuninck and Proximus

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

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

Diversification Opportunities for Deceuninck and Proximus

0.61

Correlation Coefficient

Deceuninck  Proximus

Poor diversification

The 3 months correlation between Deceuninck and Proximus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Deceuninck and Proximus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus NV and Deceuninck 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 Deceuninck 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 Deceuninck i.e., Deceuninck and Proximus go up and down completely randomly.

Pair Corralation between Deceuninck and Proximus

Assuming the 90 days trading horizon Deceuninck is expected to generate 0.56 times more return on investment than Proximus. However, Deceuninck is 1.78 times less risky than Proximus. It trades about -0.11 of its potential returns per unit of risk. Proximus NV is currently generating about -0.19 per unit of risk. If you would invest  257.00  in Deceuninck on September 23, 2024 and sell it today you would lose (21.00) from holding Deceuninck or give up 8.17% of portfolio value over 90 days.

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

Deceuninck  vs.  Proximus NV

Deceuninck

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deceuninck 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.

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 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 Deceuninck and Proximus

The main advantage of trading using opposite Deceuninck and Proximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deceuninck 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 Deceuninck 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.