Correlation Between Barco NV and Groep Brussel
Can any of the company-specific risk be diversified away by investing in both Barco NV and Groep Brussel 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 Groep Brussel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Groep Brussel Lambert, you can compare the effects of market volatilities on Barco NV and Groep Brussel 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 Groep Brussel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Groep Brussel.
Diversification Opportunities for Barco NV and Groep Brussel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barco and Groep is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert 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 Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Barco NV i.e., Barco NV and Groep Brussel go up and down completely randomly.
Pair Corralation between Barco NV and Groep Brussel
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Groep Brussel. In addition to that, Barco NV is 2.2 times more volatile than Groep Brussel Lambert. It trades about -0.06 of its total potential returns per unit of risk. Groep Brussel Lambert is currently generating about -0.01 per unit of volatility. If you would invest 7,151 in Groep Brussel Lambert on August 27, 2024 and sell it today you would lose (626.00) from holding Groep Brussel Lambert or give up 8.75% 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. Groep Brussel Lambert
Performance |
| Timeline |
| Barco NV |
| Groep Brussel Lambert |
Barco NV and Groep Brussel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Groep Brussel
The main advantage of trading using opposite Barco NV and Groep Brussel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Groep Brussel 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 Groep Brussel will offset losses from the drop in Groep Brussel'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 |
| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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