Correlation Between Cenergy Holdings and AGFA Gevaert
Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and AGFA Gevaert 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 Cenergy Holdings and AGFA Gevaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenergy Holdings SA and AGFA Gevaert NV, you can compare the effects of market volatilities on Cenergy Holdings and AGFA Gevaert 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 Cenergy Holdings with a short position of AGFA Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and AGFA Gevaert.
Diversification Opportunities for Cenergy Holdings and AGFA Gevaert
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cenergy and AGFA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and AGFA Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFA Gevaert NV and Cenergy Holdings 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 Cenergy Holdings SA are associated (or correlated) with AGFA Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFA Gevaert NV has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and AGFA Gevaert go up and down completely randomly.
Pair Corralation between Cenergy Holdings and AGFA Gevaert
Assuming the 90 days trading horizon Cenergy Holdings SA is expected to generate 0.94 times more return on investment than AGFA Gevaert. However, Cenergy Holdings SA is 1.07 times less risky than AGFA Gevaert. It trades about 0.05 of its potential returns per unit of risk. AGFA Gevaert NV is currently generating about -0.1 per unit of risk. If you would invest 637.00 in Cenergy Holdings SA on September 12, 2024 and sell it today you would earn a total of 268.00 from holding Cenergy Holdings SA or generate 42.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenergy Holdings SA vs. AGFA Gevaert NV
Performance |
| Timeline |
| Cenergy Holdings |
| AGFA Gevaert NV |
Cenergy Holdings and AGFA Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenergy Holdings and AGFA Gevaert
The main advantage of trading using opposite Cenergy Holdings and AGFA Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings position performs unexpectedly, AGFA Gevaert 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 AGFA Gevaert will offset losses from the drop in AGFA Gevaert's long position.| Cenergy Holdings vs. Viohalco SA | Cenergy Holdings vs. Jensen Group | Cenergy Holdings vs. Floridienne | Cenergy Holdings vs. Compagnie du Bois |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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