Correlation Between AGFA Gevaert and Nyrstar NV
Can any of the company-specific risk be diversified away by investing in both AGFA Gevaert and Nyrstar 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 AGFA Gevaert and Nyrstar NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGFA Gevaert NV and Nyrstar NV, you can compare the effects of market volatilities on AGFA Gevaert and Nyrstar 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 AGFA Gevaert with a short position of Nyrstar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFA Gevaert and Nyrstar NV.
Diversification Opportunities for AGFA Gevaert and Nyrstar NV
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGFA and Nyrstar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding AGFA Gevaert NV and Nyrstar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyrstar NV and AGFA Gevaert 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 AGFA Gevaert NV are associated (or correlated) with Nyrstar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyrstar NV has no effect on the direction of AGFA Gevaert i.e., AGFA Gevaert and Nyrstar NV go up and down completely randomly.
Pair Corralation between AGFA Gevaert and Nyrstar NV
Assuming the 90 days trading horizon AGFA Gevaert NV is expected to under-perform the Nyrstar NV. But the stock apears to be less risky and, when comparing its historical volatility, AGFA Gevaert NV is 2.84 times less risky than Nyrstar NV. The stock trades about -0.14 of its potential returns per unit of risk. The Nyrstar NV is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.80 in Nyrstar NV on August 26, 2024 and sell it today you would earn a total of 0.02 from holding Nyrstar NV or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGFA Gevaert NV vs. Nyrstar NV
Performance |
| Timeline |
| AGFA Gevaert NV |
| Nyrstar NV |
AGFA Gevaert and Nyrstar NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGFA Gevaert and Nyrstar NV
The main advantage of trading using opposite AGFA Gevaert and Nyrstar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFA Gevaert position performs unexpectedly, Nyrstar 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 Nyrstar NV will offset losses from the drop in Nyrstar NV's long position.| AGFA Gevaert vs. NV Bekaert SA | AGFA Gevaert vs. Barco NV | AGFA Gevaert vs. EVS Broadcast Equipment | AGFA Gevaert vs. Nyrstar NV |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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