Correlation Between Barco NV and Pharming Group
Can any of the company-specific risk be diversified away by investing in both Barco NV and Pharming Group 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 Pharming Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Pharming Group NV, you can compare the effects of market volatilities on Barco NV and Pharming Group 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 Pharming Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Pharming Group.
Diversification Opportunities for Barco NV and Pharming Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barco and Pharming is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Pharming Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pharming Group 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 Pharming Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pharming Group NV has no effect on the direction of Barco NV i.e., Barco NV and Pharming Group go up and down completely randomly.
Pair Corralation between Barco NV and Pharming Group
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Pharming Group. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.75 times less risky than Pharming Group. The stock trades about -0.47 of its potential returns per unit of risk. The Pharming Group NV is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Pharming Group NV on September 2, 2024 and sell it today you would lose (4.00) from holding Pharming Group NV or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Pharming Group NV
Performance |
| Timeline |
| Barco NV |
| Pharming Group NV |
Barco NV and Pharming Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Pharming Group
The main advantage of trading using opposite Barco NV and Pharming Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Pharming Group 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 Pharming Group will offset losses from the drop in Pharming Group'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 |
| Pharming Group vs. Galapagos NV | Pharming Group vs. Koninklijke BAM Groep | Pharming Group vs. Fugro NV | Pharming Group vs. PostNL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |