Correlation Between Wereldhave and VEON

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

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

Diversification Opportunities for Wereldhave and VEON

-0.61

Correlation Coefficient

Wereldhave  VEON

Excellent diversification

The 3 months correlation between Wereldhave and VEON is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Wereldhave NV and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON 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 VEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEON has no effect on the direction of Wereldhave i.e., Wereldhave and VEON go up and down completely randomly.

Pair Corralation between Wereldhave and VEON

Assuming the 90 days trading horizon Wereldhave NV is expected to under-perform the VEON. But the stock apears to be less risky and, when comparing its historical volatility, Wereldhave NV is 3.26 times less risky than VEON. The stock trades about -0.01 of its potential returns per unit of risk. The VEON is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  97.00  in VEON on August 30, 2024 and sell it today you would earn a total of  22.00  from holding VEON or generate 22.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Wereldhave NV  vs.  VEON

Wereldhave NV

Risk-Adjusted Performance

0 of 100

Very Weak

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

VEON

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VEON are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, VEON unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wereldhave and VEON

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

The idea behind Wereldhave NV and VEON 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.