Correlation Between Immersion and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Immersion and Melexis 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 Immersion and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immersion SA and Melexis NV, you can compare the effects of market volatilities on Immersion and Melexis 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 Immersion with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immersion and Melexis NV.
Diversification Opportunities for Immersion and Melexis NV
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Immersion and Melexis is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Immersion SA and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Immersion 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 Immersion SA are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Immersion i.e., Immersion and Melexis NV go up and down completely randomly.
Pair Corralation between Immersion and Melexis NV
Assuming the 90 days trading horizon Immersion SA is expected to generate 2.96 times more return on investment than Melexis NV. However, Immersion is 2.96 times more volatile than Melexis NV. It trades about 0.0 of its potential returns per unit of risk. Melexis NV is currently generating about -0.02 per unit of risk. If you would invest 400.00 in Immersion SA on September 3, 2024 and sell it today you would lose (234.00) from holding Immersion SA or give up 58.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Immersion SA vs. Melexis NV
Performance |
| Timeline |
| Immersion SA |
| Melexis NV |
Immersion and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immersion and Melexis NV
The main advantage of trading using opposite Immersion and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immersion position performs unexpectedly, Melexis 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| Immersion vs. Melexis NV | Immersion vs. ageas SANV | Immersion vs. Sofina Socit Anonyme | Immersion vs. Barco NV |
| Melexis NV vs. Ackermans Van Haaren | Melexis NV vs. Sofina Socit Anonyme | Melexis NV vs. ageas SANV | Melexis NV vs. Barco 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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