Correlation Between Atenor SA and AGFA Gevaert
Can any of the company-specific risk be diversified away by investing in both Atenor SA and AGFA Gevaert 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 Atenor SA and AGFA Gevaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atenor SA and AGFA Gevaert NV, you can compare the effects of market volatilities on Atenor SA and AGFA Gevaert 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 Atenor SA with a short position of AGFA Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atenor SA and AGFA Gevaert.
Diversification Opportunities for Atenor SA and AGFA Gevaert
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atenor and AGFA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Atenor SA and AGFA Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFA Gevaert NV and Atenor SA 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 Atenor SA are associated (or correlated) with AGFA Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFA Gevaert NV has no effect on the direction of Atenor SA i.e., Atenor SA and AGFA Gevaert go up and down completely randomly.
Pair Corralation between Atenor SA and AGFA Gevaert
Assuming the 90 days trading horizon Atenor SA is expected to under-perform the AGFA Gevaert. But the stock apears to be less risky and, when comparing its historical volatility, Atenor SA is 2.96 times less risky than AGFA Gevaert. The stock trades about -0.52 of its potential returns per unit of risk. The AGFA Gevaert NV is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 93.00 in AGFA Gevaert NV on September 13, 2024 and sell it today you would lose (20.00) from holding AGFA Gevaert NV or give up 21.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atenor SA vs. AGFA Gevaert NV
Performance |
| Timeline |
| Atenor SA |
| AGFA Gevaert NV |
Atenor SA and AGFA Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atenor SA and AGFA Gevaert
The main advantage of trading using opposite Atenor SA and AGFA Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atenor SA position performs unexpectedly, AGFA Gevaert 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 AGFA Gevaert will offset losses from the drop in AGFA Gevaert's long position.The idea behind Atenor SA and AGFA Gevaert NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AGFA Gevaert vs. NV Bekaert SA | AGFA Gevaert vs. Barco NV | AGFA Gevaert vs. EVS Broadcast Equipment | AGFA Gevaert vs. Nyrstar 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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