Correlation Between Eurocommercial Properties and Sligro Food

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

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

Diversification Opportunities for Eurocommercial Properties and Sligro Food

0.89

Correlation Coefficient

Eurocommercial Properties  Sligro Food

Very poor diversification

The 3 months correlation between Eurocommercial and Sligro is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Eurocommercial Properties NV and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Eurocommercial Properties 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 Eurocommercial Properties NV are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Eurocommercial Properties i.e., Eurocommercial Properties and Sligro Food go up and down completely randomly.

Pair Corralation between Eurocommercial Properties and Sligro Food

Assuming the 90 days trading horizon Eurocommercial Properties NV is expected to under-perform the Sligro Food. But the stock apears to be less risky and, when comparing its historical volatility, Eurocommercial Properties NV is 1.21 times less risky than Sligro Food. The stock trades about -0.2 of its potential returns per unit of risk. The Sligro Food Group is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  1,242  in Sligro Food Group on September 20, 2024 and sell it today you would lose (144.00) from holding Sligro Food Group or give up 11.59% of portfolio value over 90 days.

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

Eurocommercial Properties NV  vs.  Sligro Food Group

Eurocommercial Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eurocommercial Properties 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 basic indicators 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.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Eurocommercial Properties and Sligro Food

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

The idea behind Eurocommercial Properties NV and Sligro Food Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.