Correlation Between Cofinimmo and Wereldhav

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

By analyzing existing cross correlation between Cofinimmo SA and Wereldhav B Sicafi, you can compare the effects of market volatilities on Cofinimmo and Wereldhav 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 Wereldhav. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofinimmo and Wereldhav.

Diversification Opportunities for Cofinimmo and Wereldhav

0.76

Correlation Coefficient

Cofinimmo  Wereldhav

Poor diversification

The 3 months correlation between Cofinimmo and Wereldhav is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and Wereldhav B Sicafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhav B Sicafi 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 Wereldhav. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhav B Sicafi has no effect on the direction of Cofinimmo i.e., Cofinimmo and Wereldhav go up and down completely randomly.

Pair Corralation between Cofinimmo and Wereldhav

Assuming the 90 days trading horizon Cofinimmo is expected to generate 1.15 times less return on investment than Wereldhav. In addition to that, Cofinimmo is 1.15 times more volatile than Wereldhav B Sicafi. It trades about 0.12 of its total potential returns per unit of risk. Wereldhav B Sicafi is currently generating about 0.16 per unit of volatility. If you would invest  4,550  in Wereldhav B Sicafi on December 26, 2024 and sell it today you would earn a total of  570.00  from holding Wereldhav B Sicafi or generate 12.53% return on investment over 90 days.

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

Cofinimmo SA  vs.  Wereldhav B Sicafi

Cofinimmo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cofinimmo SA are ranked lower than 9 (%) 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.

Wereldhav B Sicafi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wereldhav B Sicafi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wereldhav may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cofinimmo and Wereldhav

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

The idea behind Cofinimmo SA and Wereldhav B Sicafi 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 Transaction History module to view history of all your transactions and understand their impact on performance.