Correlation Between Elecnor SA and NBI Bearings
Can any of the company-specific risk be diversified away by investing in both Elecnor SA and NBI Bearings 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 Elecnor SA and NBI Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elecnor SA and NBI Bearings Europe, you can compare the effects of market volatilities on Elecnor SA and NBI Bearings 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 Elecnor SA with a short position of NBI Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elecnor SA and NBI Bearings.
Diversification Opportunities for Elecnor SA and NBI Bearings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elecnor and NBI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Elecnor SA and NBI Bearings Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Bearings Europe and Elecnor SA 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 Elecnor SA are associated (or correlated) with NBI Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Bearings Europe has no effect on the direction of Elecnor SA i.e., Elecnor SA and NBI Bearings go up and down completely randomly.
Pair Corralation between Elecnor SA and NBI Bearings
Assuming the 90 days trading horizon Elecnor SA is expected to generate 1.33 times more return on investment than NBI Bearings. However, Elecnor SA is 1.33 times more volatile than NBI Bearings Europe. It trades about 0.05 of its potential returns per unit of risk. NBI Bearings Europe is currently generating about -0.02 per unit of risk. If you would invest 1,396 in Elecnor SA on November 3, 2024 and sell it today you would earn a total of 272.00 from holding Elecnor SA or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elecnor SA vs. NBI Bearings Europe
Performance |
| Timeline |
| Elecnor SA |
| NBI Bearings Europe |
Elecnor SA and NBI Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elecnor SA and NBI Bearings
The main advantage of trading using opposite Elecnor SA and NBI Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elecnor SA position performs unexpectedly, NBI Bearings 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 NBI Bearings will offset losses from the drop in NBI Bearings' long position.| Elecnor SA vs. Miquel y Costas | Elecnor SA vs. Construcciones y Auxiliar | Elecnor SA vs. Grupo Catalana Occidente | Elecnor SA vs. Tecnicas Reunidas |
| NBI Bearings vs. Metrovacesa SA | NBI Bearings vs. Elecnor SA | NBI Bearings vs. Mapfre | NBI Bearings vs. Tander Inversiones SOCIMI |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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