Correlation Between Beyond Meat and Euronav NV

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Can any of the company-specific risk be diversified away by investing in both Beyond Meat and Euronav NV 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 Beyond Meat and Euronav NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Euronav NV, you can compare the effects of market volatilities on Beyond Meat and Euronav NV 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 Beyond Meat with a short position of Euronav NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Euronav NV.

Diversification Opportunities for Beyond Meat and Euronav NV

0.91
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Beyond and Euronav is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Euronav NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronav NV and Beyond Meat 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 Beyond Meat are associated (or correlated) with Euronav NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronav NV has no effect on the direction of Beyond Meat i.e., Beyond Meat and Euronav NV go up and down completely randomly.

Pair Corralation between Beyond Meat and Euronav NV

Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Euronav NV. In addition to that, Beyond Meat is 2.07 times more volatile than Euronav NV. It trades about -0.02 of its total potential returns per unit of risk. Euronav NV is currently generating about 0.0 per unit of volatility. If you would invest  1,083  in Euronav NV on September 13, 2024 and sell it today you would lose (144.00) from holding Euronav NV or give up 13.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.8%
ValuesDaily Returns

Beyond Meat  vs.  Euronav NV

 Performance 
       Timeline  
Beyond Meat 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Euronav NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Euronav NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Beyond Meat and Euronav NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Beyond Meat and Euronav NV

The main advantage of trading using opposite Beyond Meat and Euronav NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat position performs unexpectedly, Euronav NV 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 Euronav NV will offset losses from the drop in Euronav NV's long position.
The idea behind Beyond Meat and Euronav NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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