Correlation Between Barco NV and Compagnie
Can any of the company-specific risk be diversified away by investing in both Barco NV and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Compagnie d Entreprises, you can compare the effects of market volatilities on Barco NV and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Compagnie.
Diversification Opportunities for Barco NV and Compagnie
Poor diversification
The 3 months correlation between Barco and Compagnie is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Compagnie d Entreprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie d Entreprises 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie d Entreprises has no effect on the direction of Barco NV i.e., Barco NV and Compagnie go up and down completely randomly.
Pair Corralation between Barco NV and Compagnie
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Compagnie. In addition to that, Barco NV is 1.23 times more volatile than Compagnie d Entreprises. It trades about -0.06 of its total potential returns per unit of risk. Compagnie d Entreprises is currently generating about -0.03 per unit of volatility. If you would invest 864.00 in Compagnie d Entreprises on August 30, 2024 and sell it today you would lose (255.00) from holding Compagnie d Entreprises or give up 29.51% 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. Compagnie d Entreprises
Performance |
| Timeline |
| Barco NV |
| Compagnie d Entreprises |
Barco NV and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Compagnie
The main advantage of trading using opposite Barco NV and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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