Correlation Between Barco NV and Umicore SA
Can any of the company-specific risk be diversified away by investing in both Barco NV and Umicore SA 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 Umicore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Umicore SA, you can compare the effects of market volatilities on Barco NV and Umicore SA 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 Umicore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Umicore SA.
Diversification Opportunities for Barco NV and Umicore SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barco and Umicore is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Umicore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA 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 Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA has no effect on the direction of Barco NV i.e., Barco NV and Umicore SA go up and down completely randomly.
Pair Corralation between Barco NV and Umicore SA
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Umicore SA. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.61 times less risky than Umicore SA. The stock trades about -0.3 of its potential returns per unit of risk. The Umicore SA is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,130 in Umicore SA on August 28, 2024 and sell it today you would lose (70.00) from holding Umicore SA or give up 6.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Umicore SA
Performance |
| Timeline |
| Barco NV |
| Umicore SA |
Barco NV and Umicore SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Umicore SA
The main advantage of trading using opposite Barco NV and Umicore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Umicore SA 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 Umicore SA will offset losses from the drop in Umicore SA'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 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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