Correlation Between Vastned Retail and DISTRICT METALS

Can any of the company-specific risk be diversified away by investing in both Vastned Retail and DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS, you can compare the effects of market volatilities on Vastned Retail and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and DISTRICT METALS.

Diversification Opportunities for Vastned Retail and DISTRICT METALS

-0.49

Correlation Coefficient

Vastned Retail  DISTRICT METALS

Very good diversification

The 3 months correlation between Vastned and DISTRICT is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of Vastned Retail i.e., Vastned Retail and DISTRICT METALS go up and down completely randomly.

Pair Corralation between Vastned Retail and DISTRICT METALS

Assuming the 90 days horizon Vastned Retail NV is expected to generate 0.21 times more return on investment than DISTRICT METALS. However, Vastned Retail NV is 4.68 times less risky than DISTRICT METALS. It trades about 0.81 of its potential returns per unit of risk. DISTRICT METALS is currently generating about 0.08 per unit of risk. If you would invest  2,105  in Vastned Retail NV on October 22, 2024 and sell it today you would earn a total of  55.00  from holding Vastned Retail NV or generate 2.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	25.0%
Values	Daily Returns

Vastned Retail NV  vs.  DISTRICT METALS

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

DISTRICT METALS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Vastned Retail and DISTRICT METALS

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

The idea behind Vastned Retail NV and DISTRICT METALS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.