Correlation Between Allfunds and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Allfunds and Vastned Retail 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 Allfunds and Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allfunds Group and Vastned Retail NV, you can compare the effects of market volatilities on Allfunds and Vastned Retail 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 Allfunds with a short position of Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allfunds and Vastned Retail.
Diversification Opportunities for Allfunds and Vastned Retail
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allfunds and Vastned is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Allfunds Group and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV and Allfunds 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 Allfunds Group are associated (or correlated) with Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Allfunds i.e., Allfunds and Vastned Retail go up and down completely randomly.
Pair Corralation between Allfunds and Vastned Retail
Assuming the 90 days trading horizon Allfunds Group is expected to under-perform the Vastned Retail. But the stock apears to be less risky and, when comparing its historical volatility, Allfunds Group is 1.44 times less risky than Vastned Retail. The stock trades about -0.14 of its potential returns per unit of risk. The Vastned Retail NV is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,225 in Vastned Retail NV on March 14, 2024 and sell it today you would earn a total of 150.00 from holding Vastned Retail NV or generate 6.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Allfunds Group vs. Vastned Retail NV
Performance |
Timeline |
Allfunds Group |
Vastned Retail NV |
Allfunds and Vastned Retail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allfunds and Vastned Retail
The main advantage of trading using opposite Allfunds and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allfunds position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.Allfunds vs. Instalco Intressenter AB | Allfunds vs. Euronext NV | Allfunds vs. Hydratec Industries NV | Allfunds vs. iShares Property Yield |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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