Correlation Between Brederode and Payton Planar
Can any of the company-specific risk be diversified away by investing in both Brederode and Payton Planar 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 Brederode and Payton Planar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brederode SA and Payton Planar Magnetics, you can compare the effects of market volatilities on Brederode and Payton Planar 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 Brederode with a short position of Payton Planar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brederode and Payton Planar.
Diversification Opportunities for Brederode and Payton Planar
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brederode and Payton is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brederode SA and Payton Planar Magnetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payton Planar Magnetics and Brederode 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 Brederode SA are associated (or correlated) with Payton Planar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payton Planar Magnetics has no effect on the direction of Brederode i.e., Brederode and Payton Planar go up and down completely randomly.
Pair Corralation between Brederode and Payton Planar
Assuming the 90 days trading horizon Brederode SA is expected to under-perform the Payton Planar. But the stock apears to be less risky and, when comparing its historical volatility, Brederode SA is 2.11 times less risky than Payton Planar. The stock trades about -0.2 of its potential returns per unit of risk. The Payton Planar Magnetics is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 805.00 in Payton Planar Magnetics on August 24, 2024 and sell it today you would earn a total of 50.00 from holding Payton Planar Magnetics or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brederode SA vs. Payton Planar Magnetics
Performance |
| Timeline |
| Brederode SA |
| Payton Planar Magnetics |
Brederode and Payton Planar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brederode and Payton Planar
The main advantage of trading using opposite Brederode and Payton Planar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brederode position performs unexpectedly, Payton Planar 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 Payton Planar will offset losses from the drop in Payton Planar's long position.| Brederode vs. Shurgard Self Storage | Brederode vs. Keyware Technologies NV | Brederode vs. Home Invest Belgium | Brederode vs. Ion Beam Applications |
| Payton Planar vs. Tessenderlo | Payton Planar vs. Jensen Group | Payton Planar vs. Melexis NV | Payton Planar vs. Sipef 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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