Correlation Between Barco NV and Hitechpros
Can any of the company-specific risk be diversified away by investing in both Barco NV and Hitechpros 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 Barco NV and Hitechpros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Hitechpros, you can compare the effects of market volatilities on Barco NV and Hitechpros 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 Barco NV with a short position of Hitechpros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Hitechpros.
Diversification Opportunities for Barco NV and Hitechpros
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barco and Hitechpros is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Hitechpros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitechpros and Barco NV 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 Barco NV are associated (or correlated) with Hitechpros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitechpros has no effect on the direction of Barco NV i.e., Barco NV and Hitechpros go up and down completely randomly.
Pair Corralation between Barco NV and Hitechpros
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Hitechpros. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.05 times less risky than Hitechpros. The stock trades about -0.16 of its potential returns per unit of risk. The Hitechpros is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Hitechpros on September 12, 2024 and sell it today you would lose (70.00) from holding Hitechpros or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Hitechpros
Performance |
| Timeline |
| Barco NV |
| Hitechpros |
Barco NV and Hitechpros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Hitechpros
The main advantage of trading using opposite Barco NV and Hitechpros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Hitechpros 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 Hitechpros will offset losses from the drop in Hitechpros' long position.| Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
| Hitechpros vs. Groupe Guillin SA | Hitechpros vs. Stef SA | Hitechpros vs. SA Catana Group | Hitechpros vs. Jacquet Metal Service |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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