Correlation Between Vastned Retail and Wereldhav

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

By analyzing existing cross correlation between Vastned Retail Belgium and Wereldhav B Sicafi, you can compare the effects of market volatilities on Vastned Retail and Wereldhav 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 Vastned Retail with a short position of Wereldhav. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Wereldhav.

Diversification Opportunities for Vastned Retail and Wereldhav

0.5

Correlation Coefficient

Vastned Retail  Wereldhav

Very weak diversification

The 3 months correlation between Vastned and Wereldhav is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail Belgium and Wereldhav B Sicafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhav B Sicafi and Vastned Retail 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 Vastned Retail Belgium are associated (or correlated) with Wereldhav. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhav B Sicafi has no effect on the direction of Vastned Retail i.e., Vastned Retail and Wereldhav go up and down completely randomly.

Pair Corralation between Vastned Retail and Wereldhav

Assuming the 90 days trading horizon Vastned Retail Belgium is expected to under-perform the Wereldhav. In addition to that, Vastned Retail is 1.59 times more volatile than Wereldhav B Sicafi. It trades about -0.04 of its total potential returns per unit of risk. Wereldhav B Sicafi is currently generating about 0.16 per unit of volatility. If you would invest  4,600  in Wereldhav B Sicafi on November 19, 2024 and sell it today you would earn a total of  440.00  from holding Wereldhav B Sicafi or generate 9.57% return on investment over 90 days.

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

Vastned Retail Belgium  vs.  Wereldhav B Sicafi

Vastned Retail Belgium

Risk-Adjusted Performance

Very Weak

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

Wereldhav B Sicafi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wereldhav B Sicafi are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Wereldhav may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Vastned Retail and Wereldhav

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

The idea behind Vastned Retail Belgium and Wereldhav B Sicafi 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..