Correlation Between Vastned Retail and Brunel International

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

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

Diversification Opportunities for Vastned Retail and Brunel International

0.16

Correlation Coefficient

Vastned Retail  Brunel International

Average diversification

The 3 months correlation between Vastned and Brunel is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Brunel International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunel International and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Brunel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunel International has no effect on the direction of Vastned Retail i.e., Vastned Retail and Brunel International go up and down completely randomly.

Pair Corralation between Vastned Retail and Brunel International

Assuming the 90 days trading horizon Vastned Retail NV is expected to under-perform the Brunel International. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 1.07 times less risky than Brunel International. The stock trades about -0.04 of its potential returns per unit of risk. The Brunel International NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  880.00  in Brunel International NV on September 19, 2024 and sell it today you would lose (7.00) from holding Brunel International NV or give up 0.8% of portfolio value over 90 days.

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

Vastned Retail NV  vs.  Brunel International NV

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Vastned Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brunel International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunel International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Brunel International is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vastned Retail and Brunel International

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

The idea behind Vastned Retail NV and Brunel International 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.