Correlation Between Tikehau Capital and Groep Brussel

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

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

Diversification Opportunities for Tikehau Capital and Groep Brussel

0.02

Correlation Coefficient

Tikehau Capital  Groep Brussel

Significant diversification

The 3 months correlation between Tikehau and Groep is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Tikehau Capital and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert and Tikehau Capital 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 Tikehau Capital are associated (or correlated) with Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Tikehau Capital i.e., Tikehau Capital and Groep Brussel go up and down completely randomly.

Pair Corralation between Tikehau Capital and Groep Brussel

Assuming the 90 days trading horizon Tikehau Capital is expected to generate 1.96 times more return on investment than Groep Brussel. However, Tikehau Capital is 1.96 times more volatile than Groep Brussel Lambert. It trades about 0.07 of its potential returns per unit of risk. Groep Brussel Lambert is currently generating about -0.02 per unit of risk. If you would invest  2,095  in Tikehau Capital on February 2, 2024 and sell it today you would earn a total of  105.00  from holding Tikehau Capital or generate 5.01% return on investment over 90 days.

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

Tikehau Capital  vs.  Groep Brussel Lambert

Tikehau Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tikehau Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tikehau Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Groep Brussel Lambert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groep Brussel Lambert has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Groep Brussel is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Tikehau Capital and Groep Brussel

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

The idea behind Tikehau Capital and Groep Brussel Lambert 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.