Correlation Between Abbott Laboratories and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and NV Bekaert 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 Abbott Laboratories and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and NV Bekaert SA, you can compare the effects of market volatilities on Abbott Laboratories and NV Bekaert 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 Abbott Laboratories with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and NV Bekaert.
Diversification Opportunities for Abbott Laboratories and NV Bekaert
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Abbott and BEKAY is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and NV Bekaert go up and down completely randomly.
Pair Corralation between Abbott Laboratories and NV Bekaert
Considering the 90-day investment horizon Abbott Laboratories is expected to generate 2.46 times less return on investment than NV Bekaert. But when comparing it to its historical volatility, Abbott Laboratories is 2.3 times less risky than NV Bekaert. It trades about 0.02 of its potential returns per unit of risk. NV Bekaert SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 351.00 in NV Bekaert SA on September 3, 2024 and sell it today you would earn a total of 36.00 from holding NV Bekaert SA or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.62% |
| Values | Daily Returns |
Abbott Laboratories vs. NV Bekaert SA
Performance |
| Timeline |
| Abbott Laboratories |
| NV Bekaert SA |
Abbott Laboratories and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and NV Bekaert
The main advantage of trading using opposite Abbott Laboratories and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Abbott Laboratories vs. AbbVie Inc | Abbott Laboratories vs. Eli Lilly and | Abbott Laboratories vs. Bristol Myers Squibb | Abbott Laboratories vs. Johnson Johnson |
| NV Bekaert vs. Thyssenkrupp AG ON | NV Bekaert vs. Mueller Industries | NV Bekaert vs. Insteel Industries | NV Bekaert vs. Carpenter Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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