Correlation Between Cofinimmo and GIMV NV

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

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

Diversification Opportunities for Cofinimmo and GIMV NV

0.08

Correlation Coefficient

Cofinimmo  GIMV NV

Significant diversification

The 3 months correlation between Cofinimmo and GIMV is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and GIMV NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIMV NV and Cofinimmo 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 Cofinimmo SA are associated (or correlated) with GIMV NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIMV NV has no effect on the direction of Cofinimmo i.e., Cofinimmo and GIMV NV go up and down completely randomly.

Pair Corralation between Cofinimmo and GIMV NV

Assuming the 90 days trading horizon Cofinimmo SA is expected to generate 1.11 times more return on investment than GIMV NV. However, Cofinimmo is 1.11 times more volatile than GIMV NV. It trades about 0.13 of its potential returns per unit of risk. GIMV NV is currently generating about 0.01 per unit of risk. If you would invest  5,495  in Cofinimmo SA on December 30, 2024 and sell it today you would earn a total of  635.00  from holding Cofinimmo SA or generate 11.56% return on investment over 90 days.

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

Cofinimmo SA  vs.  GIMV NV

Cofinimmo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cofinimmo SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cofinimmo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GIMV NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days GIMV NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GIMV NV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cofinimmo and GIMV NV

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

The idea behind Cofinimmo SA and GIMV 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.