Correlation Between Barco NV and Payton Planar
Can any of the company-specific risk be diversified away by investing in both Barco NV and Payton Planar 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 Payton Planar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Payton Planar Magnetics, you can compare the effects of market volatilities on Barco NV and Payton Planar 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 Payton Planar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Payton Planar.
Diversification Opportunities for Barco NV and Payton Planar
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barco and Payton is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Payton Planar Magnetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payton Planar Magnetics 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 Payton Planar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payton Planar Magnetics has no effect on the direction of Barco NV i.e., Barco NV and Payton Planar go up and down completely randomly.
Pair Corralation between Barco NV and Payton Planar
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Payton Planar. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.53 times less risky than Payton Planar. The stock trades about -0.37 of its potential returns per unit of risk. The Payton Planar Magnetics is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Payton Planar Magnetics on August 27, 2024 and sell it today you would earn a total of 40.00 from holding Payton Planar Magnetics or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Payton Planar Magnetics
Performance |
| Timeline |
| Barco NV |
| Payton Planar Magnetics |
Barco NV and Payton Planar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Payton Planar
The main advantage of trading using opposite Barco NV and Payton Planar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Payton Planar 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 Payton Planar will offset losses from the drop in Payton Planar's long position.| Barco NV vs. Crescent NV | Barco NV vs. Ion Beam Applications | Barco NV vs. Nyrstar NV | Barco NV vs. AGFA Gevaert NV |
| Payton Planar vs. Tessenderlo | Payton Planar vs. Jensen Group | Payton Planar vs. Melexis NV | Payton Planar vs. Sipef 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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