Correlation Between Azelis Group and Cenergy Holdings
Can any of the company-specific risk be diversified away by investing in both Azelis Group and Cenergy Holdings 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 Azelis Group and Cenergy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azelis Group NV and Cenergy Holdings SA, you can compare the effects of market volatilities on Azelis Group and Cenergy Holdings 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 Azelis Group with a short position of Cenergy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azelis Group and Cenergy Holdings.
Diversification Opportunities for Azelis Group and Cenergy Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Azelis and Cenergy is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Azelis Group NV and Cenergy Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenergy Holdings and Azelis Group 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 Azelis Group NV are associated (or correlated) with Cenergy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenergy Holdings has no effect on the direction of Azelis Group i.e., Azelis Group and Cenergy Holdings go up and down completely randomly.
Pair Corralation between Azelis Group and Cenergy Holdings
Assuming the 90 days trading horizon Azelis Group NV is expected to generate 0.6 times more return on investment than Cenergy Holdings. However, Azelis Group NV is 1.67 times less risky than Cenergy Holdings. It trades about 0.01 of its potential returns per unit of risk. Cenergy Holdings SA is currently generating about -0.01 per unit of risk. If you would invest 1,940 in Azelis Group NV on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Azelis Group NV or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Azelis Group NV vs. Cenergy Holdings SA
Performance |
| Timeline |
| Azelis Group NV |
| Cenergy Holdings |
Azelis Group and Cenergy Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Azelis Group and Cenergy Holdings
The main advantage of trading using opposite Azelis Group and Cenergy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azelis Group position performs unexpectedly, Cenergy Holdings 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 Cenergy Holdings will offset losses from the drop in Cenergy Holdings' long position.| Azelis Group vs. IMCD NV | Azelis Group vs. DIeteren Group SA | Azelis Group vs. DEME Group NV | Azelis Group vs. NV Bekaert SA |
| Cenergy Holdings vs. Viohalco SA | Cenergy Holdings vs. Jensen Group | Cenergy Holdings vs. Floridienne | Cenergy Holdings vs. Compagnie du Bois |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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