Correlation Between Etablissementen Franz and Metro
Can any of the company-specific risk be diversified away by investing in both Etablissementen Franz and Metro 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 Etablissementen Franz and Metro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etablissementen Franz Colruyt and Metro Inc, you can compare the effects of market volatilities on Etablissementen Franz and Metro 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 Etablissementen Franz with a short position of Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissementen Franz and Metro.
Diversification Opportunities for Etablissementen Franz and Metro
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Etablissementen and Metro is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Etablissementen Franz Colruyt and Metro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Inc and Etablissementen Franz 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 Etablissementen Franz Colruyt are associated (or correlated) with Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Inc has no effect on the direction of Etablissementen Franz i.e., Etablissementen Franz and Metro go up and down completely randomly.
Pair Corralation between Etablissementen Franz and Metro
Assuming the 90 days horizon Etablissementen Franz Colruyt is expected to generate 2.75 times more return on investment than Metro. However, Etablissementen Franz is 2.75 times more volatile than Metro Inc. It trades about 0.02 of its potential returns per unit of risk. Metro Inc is currently generating about -0.23 per unit of risk. If you would invest 1,095 in Etablissementen Franz Colruyt on January 24, 2024 and sell it today you would earn a total of 12.00 from holding Etablissementen Franz Colruyt or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissementen Franz Colruyt vs. Metro Inc
Performance |
| Timeline |
| Etablissementen Franz |
| Metro Inc |
Etablissementen Franz and Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissementen Franz and Metro
The main advantage of trading using opposite Etablissementen Franz and Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissementen Franz position performs unexpectedly, Metro 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 Metro will offset losses from the drop in Metro's long position.| Etablissementen Franz vs. Roundhill Bitcoin Covered | Etablissementen Franz vs. Schwab Large Cap Value | Etablissementen Franz vs. Simplify Equity PLUS | Etablissementen Franz vs. SPDR Portfolio SP |
| Metro vs. Sun Life Financial | Metro vs. Roth CH Acquisition | Metro vs. Signal Advance | Metro vs. Video River Networks |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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