Correlation Between GIMV NV and Care Property

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

By analyzing existing cross correlation between GIMV NV and Care Property Invest, you can compare the effects of market volatilities on GIMV NV and Care Property 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 GIMV NV with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of GIMV NV and Care Property.

Diversification Opportunities for GIMV NV and Care Property

0.3

Correlation Coefficient

GIMV NV  Care Property

Weak diversification

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

Pair Corralation between GIMV NV and Care Property

Assuming the 90 days trading horizon GIMV NV is expected to generate 10.16 times less return on investment than Care Property. But when comparing it to its historical volatility, GIMV NV is 1.14 times less risky than Care Property. It trades about 0.01 of its potential returns per unit of risk. Care Property Invest is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,130  in Care Property Invest on December 30, 2024 and sell it today you would earn a total of  82.00  from holding Care Property Invest or generate 7.26% return on investment over 90 days.

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

GIMV NV  vs.  Care Property Invest

GIMV NV

Risk-Adjusted Performance

Very Weak

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

Care Property Invest

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Care Property Invest are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Care Property may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GIMV NV and Care Property

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

The idea behind GIMV NV and Care Property Invest 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.