Correlation Between Econocom Group and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Econocom Group 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 Econocom Group and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Econocom Group SANV and NV Bekaert SA, you can compare the effects of market volatilities on Econocom Group 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 Econocom Group with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Econocom Group and NV Bekaert.
Diversification Opportunities for Econocom Group and NV Bekaert
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Econocom and BEKB is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Econocom Group SANV 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 Econocom Group 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 Econocom Group SANV 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 Econocom Group i.e., Econocom Group and NV Bekaert go up and down completely randomly.
Pair Corralation between Econocom Group and NV Bekaert
Assuming the 90 days trading horizon Econocom Group SANV is expected to under-perform the NV Bekaert. In addition to that, Econocom Group is 1.57 times more volatile than NV Bekaert SA. It trades about -0.03 of its total potential returns per unit of risk. NV Bekaert SA is currently generating about -0.03 per unit of volatility. If you would invest 3,955 in NV Bekaert SA on August 26, 2024 and sell it today you would lose (703.00) from holding NV Bekaert SA or give up 17.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Econocom Group SANV vs. NV Bekaert SA
Performance |
| Timeline |
| Econocom Group SANV |
| NV Bekaert SA |
Econocom Group and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Econocom Group and NV Bekaert
The main advantage of trading using opposite Econocom Group and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Econocom Group 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.| Econocom Group vs. Crescent NV | Econocom Group vs. Ion Beam Applications | Econocom Group vs. Nyrstar NV | Econocom Group vs. AGFA Gevaert NV |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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