Correlation Between Vastned Retail and BANK HANDLOWY

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

By analyzing existing cross correlation between Vastned Retail NV and BANK HANDLOWY, you can compare the effects of market volatilities on Vastned Retail and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and BANK HANDLOWY.

Diversification Opportunities for Vastned Retail and BANK HANDLOWY

-0.53

Correlation Coefficient

Vastned Retail  BANK HANDLOWY

Excellent diversification

The 3 months correlation between Vastned and BANK is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 NV are associated (or correlated) with BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Vastned Retail i.e., Vastned Retail and BANK HANDLOWY go up and down completely randomly.

Pair Corralation between Vastned Retail and BANK HANDLOWY

Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the BANK HANDLOWY. In addition to that, Vastned Retail is 1.18 times more volatile than BANK HANDLOWY. It trades about -0.1 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about 0.0 per unit of volatility. If you would invest  2,155  in BANK HANDLOWY on September 16, 2024 and sell it today you would earn a total of  0.00  from holding BANK HANDLOWY or generate 0.0% return on investment over 90 days.

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

Vastned Retail NV  vs.  BANK HANDLOWY

Vastned Retail NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vastned Retail NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Vastned Retail is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

BANK HANDLOWY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK HANDLOWY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK HANDLOWY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vastned Retail and BANK HANDLOWY

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

The idea behind Vastned Retail NV and BANK HANDLOWY 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.