Correlation Between Kerlink SAS and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Kerlink SAS 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 Kerlink SAS and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerlink SAS and Melexis NV, you can compare the effects of market volatilities on Kerlink SAS 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 Kerlink SAS with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerlink SAS and Melexis NV.
Diversification Opportunities for Kerlink SAS and Melexis NV
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kerlink and Melexis is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kerlink SAS and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Kerlink SAS 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 Kerlink SAS 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 Kerlink SAS i.e., Kerlink SAS and Melexis NV go up and down completely randomly.
Pair Corralation between Kerlink SAS and Melexis NV
Assuming the 90 days trading horizon Kerlink SAS is expected to generate 2.18 times more return on investment than Melexis NV. However, Kerlink SAS is 2.18 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 57.00 in Kerlink SAS on September 12, 2024 and sell it today you would lose (1.00) from holding Kerlink SAS or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kerlink SAS vs. Melexis NV
Performance |
| Timeline |
| Kerlink SAS |
| Melexis NV |
Kerlink SAS and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerlink SAS and Melexis NV
The main advantage of trading using opposite Kerlink SAS and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerlink SAS 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.| Kerlink SAS vs. Claranova SE | Kerlink SAS vs. Balyo SA | Kerlink SAS vs. DBT SA | Kerlink SAS vs. Wallix Group SA |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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