Correlation Between Proximus and Bpost NV

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

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

Diversification Opportunities for Proximus and Bpost NV

-0.84

Correlation Coefficient

Proximus  Bpost NV

Pay attention - limited upside

The 3 months correlation between Proximus and Bpost is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Proximus NV and Bpost NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bpost NV and Proximus 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 Proximus NV are associated (or correlated) with Bpost NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bpost NV has no effect on the direction of Proximus i.e., Proximus and Bpost NV go up and down completely randomly.

Pair Corralation between Proximus and Bpost NV

Assuming the 90 days trading horizon Proximus NV is expected to generate 0.44 times more return on investment than Bpost NV. However, Proximus NV is 2.28 times less risky than Bpost NV. It trades about 0.29 of its potential returns per unit of risk. Bpost NV is currently generating about -0.09 per unit of risk. If you would invest  499.00  in Proximus NV on December 29, 2024 and sell it today you would earn a total of  185.00  from holding Proximus NV or generate 37.07% return on investment over 90 days.

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

Proximus NV  vs.  Bpost NV

Proximus NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Proximus NV are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Proximus reported solid returns over the last few months and may actually be approaching a breakup point.

Bpost NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bpost NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Proximus and Bpost NV

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

The idea behind Proximus NV and Bpost 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.