Correlation Between Exmar NV and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Exmar NV 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 Exmar NV and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and NV Bekaert SA, you can compare the effects of market volatilities on Exmar NV 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 Exmar NV with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and NV Bekaert.
Diversification Opportunities for Exmar NV and NV Bekaert
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exmar and BEKB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV 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 Exmar 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 Exmar NV 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 Exmar NV i.e., Exmar NV and NV Bekaert go up and down completely randomly.
Pair Corralation between Exmar NV and NV Bekaert
Assuming the 90 days trading horizon Exmar NV is expected to generate 1.47 times more return on investment than NV Bekaert. However, Exmar NV is 1.47 times more volatile than NV Bekaert SA. It trades about 0.03 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.07 per unit of risk. If you would invest 812.00 in Exmar NV on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Exmar NV or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exmar NV vs. NV Bekaert SA
Performance |
| Timeline |
| Exmar NV |
| NV Bekaert SA |
Exmar NV and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and NV Bekaert
The main advantage of trading using opposite Exmar NV and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV 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.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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