Correlation Between Groep Brussel and Exor NV

Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Exor NV 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 Groep Brussel and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Groep Brussel Lambert and Exor NV, you can compare the effects of market volatilities on Groep Brussel and Exor NV 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 Groep Brussel with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Exor NV.

Diversification Opportunities for Groep Brussel and Exor NV

0.58

Correlation Coefficient

Groep Brussel  Exor NV

Very weak diversification

The 3 months correlation between Groep and Exor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and Groep Brussel 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 Groep Brussel Lambert are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of Groep Brussel i.e., Groep Brussel and Exor NV go up and down completely randomly.

Pair Corralation between Groep Brussel and Exor NV

Assuming the 90 days trading horizon Groep Brussel is expected to generate 1.03 times less return on investment than Exor NV. But when comparing it to its historical volatility, Groep Brussel Lambert is 1.43 times less risky than Exor NV. It trades about 0.24 of its potential returns per unit of risk. Exor NV is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,849  in Exor NV on April 21, 2025 and sell it today you would earn a total of  1,101  from holding Exor NV or generate 14.03% return on investment over 90 days.

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

Groep Brussel Lambert  vs.  Exor NV

Groep Brussel Lambert

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Groep Brussel Lambert are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groep Brussel reported solid returns over the last few months and may actually be approaching a breakup point.

Exor NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exor NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Exor NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Groep Brussel and Exor NV

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

The idea behind Groep Brussel Lambert and Exor NV 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.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.