Correlation Between Bpost NV and Cofinimmo
Can any of the company-specific risk be diversified away by investing in both Bpost NV and Cofinimmo 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 Bpost NV and Cofinimmo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bpost NV and Cofinimmo SA, you can compare the effects of market volatilities on Bpost NV and Cofinimmo 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 Bpost NV with a short position of Cofinimmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bpost NV and Cofinimmo.
Diversification Opportunities for Bpost NV and Cofinimmo
Poor diversification
The 3 months correlation between Bpost and Cofinimmo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and Cofinimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofinimmo SA and Bpost NV 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 Bpost NV are associated (or correlated) with Cofinimmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofinimmo SA has no effect on the direction of Bpost NV i.e., Bpost NV and Cofinimmo go up and down completely randomly.
Pair Corralation between Bpost NV and Cofinimmo
Assuming the 90 days trading horizon Bpost NV is expected to under-perform the Cofinimmo. In addition to that, Bpost NV is 1.58 times more volatile than Cofinimmo SA. It trades about -0.03 of its total potential returns per unit of risk. Cofinimmo SA is currently generating about -0.04 per unit of volatility. If you would invest 8,065 in Cofinimmo SA on February 10, 2024 and sell it today you would lose (1,435) from holding Cofinimmo SA or give up 17.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bpost NV vs. Cofinimmo SA
Performance |
Timeline |
Bpost NV |
Cofinimmo SA |
Bpost NV and Cofinimmo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bpost NV and Cofinimmo
The main advantage of trading using opposite Bpost NV and Cofinimmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bpost NV position performs unexpectedly, Cofinimmo 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 Cofinimmo will offset losses from the drop in Cofinimmo's long position.Bpost NV vs. Tessenderlo | Bpost NV vs. EVS Broadcast Equipment | Bpost NV vs. Melexis NV | Bpost NV vs. Sipef NV |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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