Correlation Between Exor NV and Groep Brussel

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

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

Diversification Opportunities for Exor NV and Groep Brussel

0.82

Correlation Coefficient

Exor NV  Groep Brussel

Very poor diversification

The 3 months correlation between Exor and Groep is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert and Exor NV 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 Exor NV are associated (or correlated) with Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Exor NV i.e., Exor NV and Groep Brussel go up and down completely randomly.

Pair Corralation between Exor NV and Groep Brussel

Assuming the 90 days trading horizon Exor NV is expected to under-perform the Groep Brussel. In addition to that, Exor NV is 2.15 times more volatile than Groep Brussel Lambert. It trades about -0.22 of its total potential returns per unit of risk. Groep Brussel Lambert is currently generating about -0.02 per unit of volatility. If you would invest  6,510  in Groep Brussel Lambert on September 18, 2024 and sell it today you would lose (15.00) from holding Groep Brussel Lambert or give up 0.23% of portfolio value over 90 days.

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

Exor NV  vs.  Groep Brussel Lambert

Exor NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exor 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.

Groep Brussel Lambert

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Exor NV and Groep Brussel

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

The idea behind Exor NV and Groep Brussel Lambert 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.