Correlation Between Immobiliere Distri and Lyxor BEL

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

By analyzing existing cross correlation between Immobiliere Distri Land NV and Lyxor BEL 20, you can compare the effects of market volatilities on Immobiliere Distri and Lyxor BEL 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 Immobiliere Distri with a short position of Lyxor BEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immobiliere Distri and Lyxor BEL.

Diversification Opportunities for Immobiliere Distri and Lyxor BEL

0.61

Correlation Coefficient

Immobiliere Distri  Lyxor BEL

Poor diversification

The 3 months correlation between Immobiliere and Lyxor is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Immobiliere Distri Land NV and Lyxor BEL 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor BEL 20 and Immobiliere Distri 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 Immobiliere Distri Land NV are associated (or correlated) with Lyxor BEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor BEL 20 has no effect on the direction of Immobiliere Distri i.e., Immobiliere Distri and Lyxor BEL go up and down completely randomly.

Pair Corralation between Immobiliere Distri and Lyxor BEL

Assuming the 90 days trading horizon Immobiliere Distri Land NV is expected to generate 4.88 times more return on investment than Lyxor BEL. However, Immobiliere Distri is 4.88 times more volatile than Lyxor BEL 20. It trades about 0.03 of its potential returns per unit of risk. Lyxor BEL 20 is currently generating about 0.14 per unit of risk. If you would invest  20,800  in Immobiliere Distri Land NV on February 4, 2024 and sell it today you would earn a total of  200.00  from holding Immobiliere Distri Land NV or generate 0.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Immobiliere Distri Land NV  vs.  Lyxor BEL 20

Immobiliere Distri Land

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immobiliere Distri Land NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobiliere Distri reported solid returns over the last few months and may actually be approaching a breakup point.

Lyxor BEL 20

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor BEL 20 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain essential indicators, Lyxor BEL may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Immobiliere Distri and Lyxor BEL

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

The idea behind Immobiliere Distri Land NV and Lyxor BEL 20 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.