Correlation Between Deceuninck and Tessenderlo
Can any of the company-specific risk be diversified away by investing in both Deceuninck and Tessenderlo 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 Deceuninck and Tessenderlo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deceuninck and Tessenderlo, you can compare the effects of market volatilities on Deceuninck and Tessenderlo 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 Deceuninck with a short position of Tessenderlo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deceuninck and Tessenderlo.
Diversification Opportunities for Deceuninck and Tessenderlo
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deceuninck and Tessenderlo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Deceuninck and Tessenderlo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tessenderlo and Deceuninck 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 Deceuninck are associated (or correlated) with Tessenderlo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tessenderlo has no effect on the direction of Deceuninck i.e., Deceuninck and Tessenderlo go up and down completely randomly.
Pair Corralation between Deceuninck and Tessenderlo
Assuming the 90 days trading horizon Deceuninck is expected to generate 1.07 times more return on investment than Tessenderlo. However, Deceuninck is 1.07 times more volatile than Tessenderlo. It trades about -0.04 of its potential returns per unit of risk. Tessenderlo is currently generating about -0.44 per unit of risk. If you would invest 233.00 in Deceuninck on August 31, 2024 and sell it today you would lose (3.00) from holding Deceuninck or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deceuninck vs. Tessenderlo
Performance |
| Timeline |
| Deceuninck |
| Tessenderlo |
Deceuninck and Tessenderlo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deceuninck and Tessenderlo
The main advantage of trading using opposite Deceuninck and Tessenderlo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deceuninck position performs unexpectedly, Tessenderlo 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 Tessenderlo will offset losses from the drop in Tessenderlo's long position.| Deceuninck vs. NV Bekaert SA | Deceuninck vs. Tessenderlo | Deceuninck vs. Barco NV | Deceuninck vs. EVS Broadcast Equipment |
| Tessenderlo vs. Ackermans Van Haaren | Tessenderlo vs. NV Bekaert SA | Tessenderlo vs. Groep Brussel Lambert | Tessenderlo vs. Tubize Fin |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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