Correlation Between Cenergy Holdings and Van De
Can any of the company-specific risk be diversified away by investing in both Cenergy Holdings and Van De 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 Van De 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 Van de Velde, you can compare the effects of market volatilities on Cenergy Holdings and Van De 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 Van De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenergy Holdings and Van De.
Diversification Opportunities for Cenergy Holdings and Van De
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cenergy and Van is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA and Van de Velde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van de Velde 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 Van De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van de Velde has no effect on the direction of Cenergy Holdings i.e., Cenergy Holdings and Van De go up and down completely randomly.
Pair Corralation between Cenergy Holdings and Van De
Assuming the 90 days trading horizon Cenergy Holdings SA is expected to under-perform the Van De. In addition to that, Cenergy Holdings is 3.5 times more volatile than Van de Velde. It trades about -0.05 of its total potential returns per unit of risk. Van de Velde is currently generating about -0.18 per unit of volatility. If you would invest 3,275 in Van de Velde on August 29, 2024 and sell it today you would lose (385.00) from holding Van de Velde or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenergy Holdings SA vs. Van de Velde
Performance |
| Timeline |
| Cenergy Holdings |
| Van de Velde |
Cenergy Holdings and Van De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenergy Holdings and Van De
The main advantage of trading using opposite Cenergy Holdings and Van De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings position performs unexpectedly, Van De 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 Van De will offset losses from the drop in Van De's long position.| Cenergy Holdings vs. NV Bekaert SA | Cenergy Holdings vs. AGFA Gevaert NV | Cenergy Holdings vs. ageas SANV | Cenergy Holdings vs. Exmar NV |
| Van De vs. EVS Broadcast Equipment | Van De vs. NV Bekaert SA | Van De vs. Tessenderlo | Van De vs. Melexis 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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