Correlation Between BEKA LUX and Impact ISR

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

By analyzing existing cross correlation between BEKA LUX SICAV and Impact ISR Performance, you can compare the effects of market volatilities on BEKA LUX and Impact ISR 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 BEKA LUX with a short position of Impact ISR. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEKA LUX and Impact ISR.

Diversification Opportunities for BEKA LUX and Impact ISR

-0.22

Correlation Coefficient

BEKA LUX  Impact ISR

Very good diversification

The 3 months correlation between BEKA and Impact is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BEKA LUX SICAV and Impact ISR Performance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact ISR Performance and BEKA LUX 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 BEKA LUX SICAV are associated (or correlated) with Impact ISR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact ISR Performance has no effect on the direction of BEKA LUX i.e., BEKA LUX and Impact ISR go up and down completely randomly.

Pair Corralation between BEKA LUX and Impact ISR

Assuming the 90 days trading horizon BEKA LUX SICAV is expected to under-perform the Impact ISR. But the fund apears to be less risky and, when comparing its historical volatility, BEKA LUX SICAV is 3.13 times less risky than Impact ISR. The fund trades about -0.36 of its potential returns per unit of risk. The Impact ISR Performance is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,336  in Impact ISR Performance on September 23, 2024 and sell it today you would lose (11.00) from holding Impact ISR Performance or give up 0.21% of portfolio value over 90 days.

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

BEKA LUX SICAV  vs.  Impact ISR Performance

BEKA LUX SICAV

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BEKA LUX SICAV are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, BEKA LUX is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Impact ISR Performance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impact ISR Performance has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, Impact ISR is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BEKA LUX and Impact ISR

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

The idea behind BEKA LUX SICAV and Impact ISR Performance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.