Correlation Between Groep Brussel and Retail Estates

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

Diversification Opportunities for Groep Brussel and Retail Estates

0.55

Correlation Coefficient

Groep Brussel  Retail Estates

Very weak diversification

The 3 months correlation between Groep and Retail is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Retail Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates has no effect on the direction of Groep Brussel i.e., Groep Brussel and Retail Estates go up and down completely randomly.

Pair Corralation between Groep Brussel and Retail Estates

Assuming the 90 days trading horizon Groep Brussel Lambert is expected to generate 0.88 times more return on investment than Retail Estates. However, Groep Brussel Lambert is 1.13 times less risky than Retail Estates. It trades about 0.13 of its potential returns per unit of risk. Retail Estates is currently generating about 0.03 per unit of risk. If you would invest  6,530  in Groep Brussel Lambert on December 30, 2024 and sell it today you would earn a total of  495.00  from holding Groep Brussel Lambert or generate 7.58% return on investment over 90 days.

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

Groep Brussel Lambert  vs.  Retail Estates

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 9 (%) 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 April 2025.

Retail Estates

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Estates are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Retail Estates 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 Groep Brussel and Retail Estates

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

The idea behind Groep Brussel Lambert and Retail Estates 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.