Correlation Between AGFA Gevaert and Payton Planar
Can any of the company-specific risk be diversified away by investing in both AGFA Gevaert and Payton Planar 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 Payton Planar 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 Payton Planar Magnetics, you can compare the effects of market volatilities on AGFA Gevaert and Payton Planar 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 Payton Planar. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGFA Gevaert and Payton Planar.
Diversification Opportunities for AGFA Gevaert and Payton Planar
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AGFA and Payton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding AGFA Gevaert NV and Payton Planar Magnetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payton Planar Magnetics 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 Payton Planar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payton Planar Magnetics has no effect on the direction of AGFA Gevaert i.e., AGFA Gevaert and Payton Planar go up and down completely randomly.
Pair Corralation between AGFA Gevaert and Payton Planar
Assuming the 90 days trading horizon AGFA Gevaert NV is expected to under-perform the Payton Planar. In addition to that, AGFA Gevaert is 1.87 times more volatile than Payton Planar Magnetics. It trades about -0.18 of its total potential returns per unit of risk. Payton Planar Magnetics is currently generating about -0.02 per unit of volatility. If you would invest 790.00 in Payton Planar Magnetics on August 31, 2024 and sell it today you would lose (20.00) from holding Payton Planar Magnetics or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGFA Gevaert NV vs. Payton Planar Magnetics
Performance |
| Timeline |
| AGFA Gevaert NV |
| Payton Planar Magnetics |
AGFA Gevaert and Payton Planar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGFA Gevaert and Payton Planar
The main advantage of trading using opposite AGFA Gevaert and Payton Planar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGFA Gevaert position performs unexpectedly, Payton Planar 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 Payton Planar will offset losses from the drop in Payton Planar'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 |
| Payton Planar vs. Tessenderlo | Payton Planar vs. Jensen Group | Payton Planar vs. Melexis NV | Payton Planar vs. Sipef NV |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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