Correlation Between Barco NV and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Barco NV and Melexis NV 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 Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Melexis NV, you can compare the effects of market volatilities on Barco NV and Melexis NV 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 Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Melexis NV.
Diversification Opportunities for Barco NV and Melexis NV
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barco and Melexis is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV 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 Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Barco NV i.e., Barco NV and Melexis NV go up and down completely randomly.
Pair Corralation between Barco NV and Melexis NV
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Melexis NV. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.49 times less risky than Melexis NV. The stock trades about -0.34 of its potential returns per unit of risk. The Melexis NV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,565 in Melexis NV on October 25, 2024 and sell it today you would earn a total of 590.00 from holding Melexis NV or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Melexis NV
Performance |
| Timeline |
| Barco NV |
| Melexis NV |
Barco NV and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Melexis NV
The main advantage of trading using opposite Barco NV and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV'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 |
| Melexis NV vs. Ackermans Van Haaren | Melexis NV vs. Sofina Socit Anonyme | Melexis NV vs. ageas SANV | Melexis NV vs. Barco 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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