Correlation Between GIMV NV and Elia Group

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

By analyzing existing cross correlation between GIMV NV and Elia Group SANV, you can compare the effects of market volatilities on GIMV NV and Elia Group 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 Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GIMV NV and Elia Group.

Diversification Opportunities for GIMV NV and Elia Group

0.81

Correlation Coefficient

GIMV NV  Elia Group

Very poor diversification

The 3 months correlation between GIMV and Elia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GIMV NV and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV 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 Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of GIMV NV i.e., GIMV NV and Elia Group go up and down completely randomly.

Pair Corralation between GIMV NV and Elia Group

Assuming the 90 days trading horizon GIMV NV is expected to generate 0.74 times more return on investment than Elia Group. However, GIMV NV is 1.35 times less risky than Elia Group. It trades about -0.08 of its potential returns per unit of risk. Elia Group SANV is currently generating about -0.25 per unit of risk. If you would invest  4,280  in GIMV NV on September 17, 2024 and sell it today you would lose (300.00) from holding GIMV NV or give up 7.01% of portfolio value over 90 days.

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

GIMV NV  vs.  Elia Group SANV

GIMV NV

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Elia Group SANV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elia Group SANV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with GIMV NV and Elia Group

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

The idea behind GIMV NV and Elia Group SANV 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.