Correlation Between VGP NV and Cofinimmo

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

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

Diversification Opportunities for VGP NV and Cofinimmo

0.52

Correlation Coefficient

VGP NV  Cofinimmo

Very weak diversification

The 3 months correlation between VGP and Cofinimmo is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Cofinimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofinimmo SA and VGP NV 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 VGP NV are associated (or correlated) with Cofinimmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofinimmo SA has no effect on the direction of VGP NV i.e., VGP NV and Cofinimmo go up and down completely randomly.

Pair Corralation between VGP NV and Cofinimmo

Assuming the 90 days trading horizon VGP NV is expected to under-perform the Cofinimmo. In addition to that, VGP NV is 1.26 times more volatile than Cofinimmo SA. It trades about -0.01 of its total potential returns per unit of risk. Cofinimmo SA is currently generating about 0.13 per unit of volatility. If you would invest  5,900  in Cofinimmo SA on December 30, 2024 and sell it today you would earn a total of  230.00  from holding Cofinimmo SA or generate 3.9% return on investment over 90 days.

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

VGP NV  vs.  Cofinimmo SA

VGP NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VGP NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VGP NV reported solid returns over the last few months and may actually be approaching a breakup point.

Cofinimmo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cofinimmo SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cofinimmo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with VGP NV and Cofinimmo

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

The idea behind VGP NV and Cofinimmo SA 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.