Correlation Between Fluxys Belgium and Van De

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

By analyzing existing cross correlation between Fluxys Belgium and Van de Velde, you can compare the effects of market volatilities on Fluxys Belgium and Van De 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 Fluxys Belgium with a short position of Van De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluxys Belgium and Van De.

Diversification Opportunities for Fluxys Belgium and Van De

0.38

Correlation Coefficient

Fluxys Belgium  Van De

Weak diversification

The 3 months correlation between Fluxys and Van is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fluxys Belgium and Van de Velde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van de Velde and Fluxys Belgium 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 Fluxys Belgium are associated (or correlated) with Van De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van de Velde has no effect on the direction of Fluxys Belgium i.e., Fluxys Belgium and Van De go up and down completely randomly.

Pair Corralation between Fluxys Belgium and Van De

Assuming the 90 days trading horizon Fluxys Belgium is expected to under-perform the Van De. In addition to that, Fluxys Belgium is 3.37 times more volatile than Van de Velde. It trades about -0.01 of its total potential returns per unit of risk. Van de Velde is currently generating about -0.03 per unit of volatility. If you would invest  3,010  in Van de Velde on September 17, 2024 and sell it today you would lose (55.00) from holding Van de Velde or give up 1.83% of portfolio value over 90 days.

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

Fluxys Belgium  vs.  Van de Velde

Fluxys Belgium

Risk-Adjusted Performance

0 of 100

Very Weak

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

Van de Velde

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fluxys Belgium and Van De

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

The idea behind Fluxys Belgium and Van de Velde 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.