Correlation Between Wereldhave and Klepierre

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

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

Diversification Opportunities for Wereldhave and Klepierre

0.9

Correlation Coefficient

Wereldhave  Klepierre

Almost no diversification

The 3 months correlation between Wereldhave and Klepierre is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Wereldhave NV and Klepierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klepierre SA and Wereldhave 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 Wereldhave NV are associated (or correlated) with Klepierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klepierre SA has no effect on the direction of Wereldhave i.e., Wereldhave and Klepierre go up and down completely randomly.

Pair Corralation between Wereldhave and Klepierre

Assuming the 90 days trading horizon Wereldhave NV is expected to generate 1.41 times more return on investment than Klepierre. However, Wereldhave is 1.41 times more volatile than Klepierre SA. It trades about 0.18 of its potential returns per unit of risk. Klepierre SA is currently generating about 0.23 per unit of risk. If you would invest  1,372  in Wereldhave NV on December 23, 2024 and sell it today you would earn a total of  206.00  from holding Wereldhave NV or generate 15.01% return on investment over 90 days.

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

Wereldhave NV  vs.  Klepierre SA

Wereldhave NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Wereldhave NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Wereldhave unveiled solid returns over the last few months and may actually be approaching a breakup point.

Klepierre SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Klepierre SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Klepierre sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wereldhave and Klepierre

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

The idea behind Wereldhave NV and Klepierre 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.