Correlation Between NV Bekaert and Econocom Group
Can any of the company-specific risk be diversified away by investing in both NV Bekaert and Econocom 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 NV Bekaert and Econocom Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NV Bekaert SA and Econocom Group SANV, you can compare the effects of market volatilities on NV Bekaert and Econocom 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 NV Bekaert with a short position of Econocom Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Bekaert and Econocom Group.
Diversification Opportunities for NV Bekaert and Econocom Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BEKB and Econocom is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and Econocom Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Econocom Group SANV and NV Bekaert 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 NV Bekaert SA are associated (or correlated) with Econocom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Econocom Group SANV has no effect on the direction of NV Bekaert i.e., NV Bekaert and Econocom Group go up and down completely randomly.
Pair Corralation between NV Bekaert and Econocom Group
Assuming the 90 days trading horizon NV Bekaert SA is expected to generate 0.67 times more return on investment than Econocom Group. However, NV Bekaert SA is 1.49 times less risky than Econocom Group. It trades about -0.01 of its potential returns per unit of risk. Econocom Group SANV is currently generating about -0.03 per unit of risk. If you would invest 3,760 in NV Bekaert SA on November 5, 2024 and sell it today you would lose (382.00) from holding NV Bekaert SA or give up 10.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NV Bekaert SA vs. Econocom Group SANV
Performance |
| Timeline |
| NV Bekaert SA |
| Econocom Group SANV |
NV Bekaert and Econocom Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Bekaert and Econocom Group
The main advantage of trading using opposite NV Bekaert and Econocom Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Bekaert position performs unexpectedly, Econocom 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 Econocom Group will offset losses from the drop in Econocom Group's long position.| NV Bekaert vs. Solvay SA | NV Bekaert vs. Ackermans Van Haaren | NV Bekaert vs. Barco NV | NV Bekaert vs. Etablissementen Franz Colruyt |
| Econocom Group vs. NV Bekaert SA | Econocom Group vs. EVS Broadcast Equipment | Econocom Group vs. Ontex Group NV | Econocom Group vs. Tessenderlo |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |