Correlation Between Wereldhave and Brunel International

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

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

Diversification Opportunities for Wereldhave and Brunel International

0.1

Correlation Coefficient

Wereldhave  Brunel International

Average diversification

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

Pair Corralation between Wereldhave and Brunel International

Assuming the 90 days trading horizon Wereldhave NV is expected to under-perform the Brunel International. But the stock apears to be less risky and, when comparing its historical volatility, Wereldhave NV is 1.6 times less risky than Brunel International. The stock trades about -0.16 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

Wereldhave NV  vs.  Brunel International NV

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 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.

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 Wereldhave and Brunel International

The main advantage of trading using opposite Wereldhave and Brunel International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wereldhave 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 Wereldhave 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.