Correlation Between NV Bekaert and Ontex Group
Can any of the company-specific risk be diversified away by investing in both NV Bekaert and Ontex 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 Ontex 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 Ontex Group NV, you can compare the effects of market volatilities on NV Bekaert and Ontex 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Bekaert and Ontex Group.
Diversification Opportunities for NV Bekaert and Ontex Group
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BEKB and Ontex is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of NV Bekaert i.e., NV Bekaert and Ontex Group go up and down completely randomly.
Pair Corralation between NV Bekaert and Ontex Group
Assuming the 90 days trading horizon NV Bekaert SA is expected to under-perform the Ontex Group. But the stock apears to be less risky and, when comparing its historical volatility, NV Bekaert SA is 1.09 times less risky than Ontex Group. The stock trades about -0.15 of its potential returns per unit of risk. The Ontex Group NV is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 904.00 in Ontex Group NV on September 1, 2024 and sell it today you would lose (107.00) from holding Ontex Group NV or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NV Bekaert SA vs. Ontex Group NV
Performance |
| Timeline |
| NV Bekaert SA |
| Ontex Group NV |
NV Bekaert and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Bekaert and Ontex Group
The main advantage of trading using opposite NV Bekaert and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Bekaert position performs unexpectedly, Ontex 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 Ontex Group will offset losses from the drop in Ontex 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 |
| Ontex Group vs. Bpost NV | Ontex Group vs. Barco NV | Ontex Group vs. Biocartis Group NV | Ontex Group vs. ageas SANV |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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