Correlation Between Groep Brussel and Inclusio Sca

Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Inclusio Sca 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 Inclusio Sca 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 Inclusio Sca, you can compare the effects of market volatilities on Groep Brussel and Inclusio Sca 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 Inclusio Sca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Inclusio Sca.

Diversification Opportunities for Groep Brussel and Inclusio Sca

0.09

Correlation Coefficient

Groep Brussel  Inclusio Sca

Significant diversification

The 3 months correlation between Groep and Inclusio is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Inclusio Sca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inclusio Sca 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 Inclusio Sca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inclusio Sca has no effect on the direction of Groep Brussel i.e., Groep Brussel and Inclusio Sca go up and down completely randomly.

Pair Corralation between Groep Brussel and Inclusio Sca

Assuming the 90 days trading horizon Groep Brussel Lambert is expected to generate 0.66 times more return on investment than Inclusio Sca. However, Groep Brussel Lambert is 1.51 times less risky than Inclusio Sca. It trades about 0.11 of its potential returns per unit of risk. Inclusio Sca is currently generating about 0.05 per unit of risk. If you would invest  6,605  in Groep Brussel Lambert on December 31, 2024 and sell it today you would earn a total of  420.00  from holding Groep Brussel Lambert or generate 6.36% return on investment over 90 days.

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

Groep Brussel Lambert  vs.  Inclusio Sca

Groep Brussel Lambert

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groep Brussel Lambert are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groep Brussel may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Inclusio Sca

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inclusio Sca are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Inclusio Sca is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groep Brussel and Inclusio Sca

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

The idea behind Groep Brussel Lambert and Inclusio Sca 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.