Correlation Between CM NV and Exor NV
Can any of the company-specific risk be diversified away by investing in both CM NV and Exor 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 CM NV and Exor NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM NV and Exor NV, you can compare the effects of market volatilities on CM NV and Exor 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 CM NV with a short position of Exor NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM NV and Exor NV.
Diversification Opportunities for CM NV and Exor NV
Very weak diversification
The 3 months correlation between CMCOM and Exor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CM NV and Exor NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exor NV and CM NV 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 CM NV are associated (or correlated) with Exor NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exor NV has no effect on the direction of CM NV i.e., CM NV and Exor NV go up and down completely randomly.
Pair Corralation between CM NV and Exor NV
Assuming the 90 days trading horizon CM NV is expected to under-perform the Exor NV. But the stock apears to be less risky and, when comparing its historical volatility, CM NV is 1.25 times less risky than Exor NV. The stock trades about -0.47 of its potential returns per unit of risk. The Exor NV is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 9,955 in Exor NV on August 27, 2024 and sell it today you would lose (435.00) from holding Exor NV or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM NV vs. Exor NV
Performance |
| Timeline |
| CM NV |
| Exor NV |
CM NV and Exor NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM NV and Exor NV
The main advantage of trading using opposite CM NV and Exor NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM NV position performs unexpectedly, Exor 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 Exor NV will offset losses from the drop in Exor NV's long position.| CM NV vs. Just Eat Takeaway | CM NV vs. Alfen Beheer BV | CM NV vs. BE Semiconductor Industries | CM NV vs. Basic Fit NV |
| Exor NV vs. CM NV | Exor NV vs. BE Semiconductor Industries | Exor NV vs. Alfen Beheer BV | Exor NV vs. ASR Nederland 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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