Correlation Between Immo Moury and VGP NV

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

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

Diversification Opportunities for Immo Moury and VGP NV

-0.23

Correlation Coefficient

Immo Moury  VGP NV

Very good diversification

The 3 months correlation between Immo and VGP is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Immo Moury SICAF and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP NV and Immo Moury 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 Immo Moury SICAF 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 Immo Moury i.e., Immo Moury and VGP NV go up and down completely randomly.

Pair Corralation between Immo Moury and VGP NV

Assuming the 90 days trading horizon Immo Moury SICAF is expected to under-perform the VGP NV. But the stock apears to be less risky and, when comparing its historical volatility, Immo Moury SICAF is 1.17 times less risky than VGP NV. The stock trades about -0.05 of its potential returns per unit of risk. The VGP NV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,010  in VGP NV on December 29, 2024 and sell it today you would earn a total of  1,000.00  from holding VGP NV or generate 14.27% return on investment over 90 days.

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

Immo Moury SICAF  vs.  VGP NV

Immo Moury SICAF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Immo Moury SICAF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Immo Moury is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

VGP NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VGP NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VGP NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Immo Moury and VGP NV

The main advantage of trading using opposite Immo Moury and VGP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immo Moury 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 Immo Moury SICAF 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.