Correlation Between Immobel and VGP NV

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

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

Diversification Opportunities for Immobel and VGP NV

0.89

Correlation Coefficient

Immobel  VGP NV

Very poor diversification

The 3 months correlation between Immobel and VGP is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Immobel and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP NV and Immobel 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 Immobel are associated (or correlated) with VGP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGP NV has no effect on the direction of Immobel i.e., Immobel and VGP NV go up and down completely randomly.

Pair Corralation between Immobel and VGP NV

Assuming the 90 days trading horizon Immobel is expected to under-perform the VGP NV. But the stock apears to be less risky and, when comparing its historical volatility, Immobel is 1.16 times less risky than VGP NV. The stock trades about -0.33 of its potential returns per unit of risk. The VGP NV is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  9,220  in VGP NV on September 2, 2024 and sell it today you would lose (1,320) from holding VGP NV or give up 14.32% of portfolio value over 90 days.

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

Immobel  vs.  VGP NV

Immobel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobel 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 basic 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.

VGP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VGP NV 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 basic 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 Immobel and VGP NV

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

The idea behind Immobel and VGP NV 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.