Correlation Between Cenergy Holdings and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and NV Bekaert 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 NV Bekaert 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 NV Bekaert SA, you can compare the effects of market volatilities on Cenergy Holdings and NV Bekaert 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 NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and NV Bekaert.
Diversification Opportunities for Cenergy Holdings and NV Bekaert
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cenergy and BEKB is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA 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 NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and NV Bekaert go up and down completely randomly.
Pair Corralation between Cenergy Holdings and NV Bekaert
Assuming the 90 days trading horizon Cenergy Holdings SA is expected to generate 1.7 times more return on investment than NV Bekaert. However, Cenergy Holdings is 1.7 times more volatile than NV Bekaert SA. It trades about 0.0 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.11 per unit of risk. If you would invest 860.00 in Cenergy Holdings SA on August 27, 2024 and sell it today you would lose (8.00) from holding Cenergy Holdings SA or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenergy Holdings SA vs. NV Bekaert SA
Performance |
| Timeline |
| Cenergy Holdings |
| NV Bekaert SA |
Cenergy Holdings and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenergy Holdings and NV Bekaert
The main advantage of trading using opposite Cenergy Holdings and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Cenergy Holdings vs. Ackermans Van Haaren | Cenergy Holdings vs. NV Bekaert SA | Cenergy Holdings vs. Groep Brussel Lambert | Cenergy Holdings vs. Tubize Fin |
| NV Bekaert vs. Solvay SA | NV Bekaert vs. Ackermans Van Haaren | NV Bekaert vs. Barco NV | NV Bekaert vs. Etablissementen Franz Colruyt |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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