Correlation Between Groep Brussel and HAL Trust

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

By analyzing existing cross correlation between Groep Brussel Lambert and HAL Trust, you can compare the effects of market volatilities on Groep Brussel and HAL Trust 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 Groep Brussel with a short position of HAL Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and HAL Trust.

Diversification Opportunities for Groep Brussel and HAL Trust

0.3

Correlation Coefficient

Groep Brussel  HAL Trust

Weak diversification

The 3 months correlation between Groep and HAL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and HAL Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAL Trust and Groep Brussel 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 Groep Brussel Lambert are associated (or correlated) with HAL Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAL Trust has no effect on the direction of Groep Brussel i.e., Groep Brussel and HAL Trust go up and down completely randomly.

Pair Corralation between Groep Brussel and HAL Trust

Assuming the 90 days trading horizon Groep Brussel Lambert is expected to under-perform the HAL Trust. In addition to that, Groep Brussel is 1.18 times more volatile than HAL Trust. It trades about -0.03 of its total potential returns per unit of risk. HAL Trust is currently generating about 0.05 per unit of volatility. If you would invest  11,400  in HAL Trust on October 25, 2024 and sell it today you would earn a total of  500.00  from holding HAL Trust or generate 4.39% return on investment over 90 days.

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

Groep Brussel Lambert  vs.  HAL Trust

Groep Brussel Lambert

Risk-Adjusted Performance

0 of 100

Very Weak

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

HAL Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, HAL Trust is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Groep Brussel and HAL Trust

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

The idea behind Groep Brussel Lambert and HAL Trust 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.