Correlation Between Bever Holding and Eurocommercial Properties
Can any of the company-specific risk be diversified away by investing in both Bever Holding and Eurocommercial Properties 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 Bever Holding and Eurocommercial Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bever Holding NV and Eurocommercial Properties NV, you can compare the effects of market volatilities on Bever Holding and Eurocommercial Properties 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 Bever Holding with a short position of Eurocommercial Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bever Holding and Eurocommercial Properties.
Diversification Opportunities for Bever Holding and Eurocommercial Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bever and Eurocommercial is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bever Holding NV and Eurocommercial Properties NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurocommercial Properties and Bever Holding 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 Bever Holding NV are associated (or correlated) with Eurocommercial Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurocommercial Properties has no effect on the direction of Bever Holding i.e., Bever Holding and Eurocommercial Properties go up and down completely randomly.
Pair Corralation between Bever Holding and Eurocommercial Properties
Assuming the 90 days trading horizon Bever Holding is expected to generate 2.69 times less return on investment than Eurocommercial Properties. In addition to that, Bever Holding is 1.91 times more volatile than Eurocommercial Properties NV. It trades about 0.03 of its total potential returns per unit of risk. Eurocommercial Properties NV is currently generating about 0.15 per unit of volatility. If you would invest 2,016 in Eurocommercial Properties NV on January 20, 2024 and sell it today you would earn a total of 69.00 from holding Eurocommercial Properties NV or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bever Holding NV vs. Eurocommercial Properties NV
Performance |
| Timeline |
| Bever Holding NV |
| Eurocommercial Properties |
Bever Holding and Eurocommercial Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bever Holding and Eurocommercial Properties
The main advantage of trading using opposite Bever Holding and Eurocommercial Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bever Holding position performs unexpectedly, Eurocommercial Properties 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 Eurocommercial Properties will offset losses from the drop in Eurocommercial Properties' long position.| Bever Holding vs. BE Semiconductor Industries | Bever Holding vs. Sligro Food Group | Bever Holding vs. Accsys Technologies | Bever Holding vs. Reinet Investments SCA |
| Eurocommercial Properties vs. Vastned Retail NV | Eurocommercial Properties vs. NSI NV | Eurocommercial Properties vs. Klepierre SA | Eurocommercial Properties vs. Koninklijke BAM Groep |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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