Correlation Between Barco NV and X Fab
Can any of the company-specific risk be diversified away by investing in both Barco NV and X Fab 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 X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and X Fab Silicon, you can compare the effects of market volatilities on Barco NV and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and X Fab.
Diversification Opportunities for Barco NV and X Fab
Poor diversification
The 3 months correlation between Barco and XFAB is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Barco NV i.e., Barco NV and X Fab go up and down completely randomly.
Pair Corralation between Barco NV and X Fab
Assuming the 90 days trading horizon Barco NV is expected to under-perform the X Fab. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 2.08 times less risky than X Fab. The stock trades about -0.3 of its potential returns per unit of risk. The X Fab Silicon is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 460.00 in X Fab Silicon on August 28, 2024 and sell it today you would lose (26.00) from holding X Fab Silicon or give up 5.65% 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. X Fab Silicon
Performance |
| Timeline |
| Barco NV |
| X Fab Silicon |
Barco NV and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and X Fab
The main advantage of trading using opposite Barco NV and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab'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 |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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