Correlation Between Vastned Retail and Sligro Food

Can any of the company-specific risk be diversified away by investing in both Vastned Retail 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 Vastned Retail and Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Vastned Retail 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 Vastned Retail with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Sligro Food.

Diversification Opportunities for Vastned Retail and Sligro Food

0.1

Correlation Coefficient

Vastned Retail  Sligro Food

Average diversification

The 3 months correlation between Vastned and Sligro is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail 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 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 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 Vastned Retail i.e., Vastned Retail and Sligro Food go up and down completely randomly.

Pair Corralation between Vastned Retail and Sligro Food

Assuming the 90 days trading horizon Vastned Retail NV is expected to under-perform the Sligro Food. In addition to that, Vastned Retail is 1.94 times more volatile than Sligro Food Group. It trades about -0.16 of its total potential returns per unit of risk. Sligro Food Group is currently generating about -0.21 per unit of volatility. If you would invest  1,092  in Sligro Food Group on September 19, 2024 and sell it today you would lose (38.00) from holding Sligro Food Group or give up 3.48% 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.  Sligro Food Group

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.

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 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.

Pair Trading with Vastned Retail and Sligro Food

The main advantage of trading using opposite Vastned Retail and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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 Vastned Retail 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.