Correlation Between Sligro Food and Wereldhave

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

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

Diversification Opportunities for Sligro Food and Wereldhave

0.93

Correlation Coefficient

Sligro Food  Wereldhave

Almost no diversification

The 3 months correlation between Sligro and Wereldhave is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Wereldhave NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhave NV and Sligro Food 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 Sligro Food Group are associated (or correlated) with Wereldhave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhave NV has no effect on the direction of Sligro Food i.e., Sligro Food and Wereldhave go up and down completely randomly.

Pair Corralation between Sligro Food and Wereldhave

Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Wereldhave. In addition to that, Sligro Food is 1.08 times more volatile than Wereldhave NV. It trades about -0.06 of its total potential returns per unit of risk. Wereldhave NV is currently generating about 0.04 per unit of volatility. If you would invest  1,097  in Wereldhave NV on September 24, 2024 and sell it today you would earn a total of  285.00  from holding Wereldhave NV or generate 25.98% return on investment over 90 days.

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

Sligro Food Group  vs.  Wereldhave NV

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 uncertain 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.

Wereldhave NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wereldhave NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Sligro Food and Wereldhave

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

The idea behind Sligro Food Group and Wereldhave 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.