Correlation Between Retail Estates and IQVIA Holdings

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

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

Diversification Opportunities for Retail Estates and IQVIA Holdings

-0.6

Correlation Coefficient

Retail Estates  IQVIA Holdings

Excellent diversification

The 3 months correlation between Retail and IQVIA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and IQVIA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQVIA Holdings and Retail Estates 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 Retail Estates NV are associated (or correlated) with IQVIA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQVIA Holdings has no effect on the direction of Retail Estates i.e., Retail Estates and IQVIA Holdings go up and down completely randomly.

Pair Corralation between Retail Estates and IQVIA Holdings

Assuming the 90 days horizon Retail Estates NV is expected to generate 0.69 times more return on investment than IQVIA Holdings. However, Retail Estates NV is 1.45 times less risky than IQVIA Holdings. It trades about 0.02 of its potential returns per unit of risk. IQVIA Holdings is currently generating about -0.13 per unit of risk. If you would invest  5,880  in Retail Estates NV on December 26, 2024 and sell it today you would earn a total of  40.00  from holding Retail Estates NV or generate 0.68% return on investment over 90 days.

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

Retail Estates NV  vs.  IQVIA Holdings

Retail Estates NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Retail Estates NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Retail Estates is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

IQVIA Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days IQVIA Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Retail Estates and IQVIA Holdings

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

The idea behind Retail Estates NV and IQVIA Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.