Correlation Between Exmar NV and Ontex Group
Can any of the company-specific risk be diversified away by investing in both Exmar NV and Ontex Group 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 Ontex Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and Ontex Group NV, you can compare the effects of market volatilities on Exmar NV and Ontex Group 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 Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and Ontex Group.
Diversification Opportunities for Exmar NV and Ontex Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exmar and Ontex is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of Exmar NV i.e., Exmar NV and Ontex Group go up and down completely randomly.
Pair Corralation between Exmar NV and Ontex Group
Assuming the 90 days trading horizon Exmar NV is expected to generate 1.55 times more return on investment than Ontex Group. However, Exmar NV is 1.55 times more volatile than Ontex Group NV. It trades about 0.08 of its potential returns per unit of risk. Ontex Group NV is currently generating about 0.03 per unit of risk. If you would invest 361.00 in Exmar NV on August 26, 2024 and sell it today you would earn a total of 446.00 from holding Exmar NV or generate 123.55% 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. Ontex Group NV
Performance |
| Timeline |
| Exmar NV |
| Ontex Group NV |
Exmar NV and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and Ontex Group
The main advantage of trading using opposite Exmar NV and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV position performs unexpectedly, Ontex Group 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 Ontex Group will offset losses from the drop in Ontex Group's long position.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis NV |
| Ontex Group vs. Brederode SA | Ontex Group vs. Compagnie du Bois | Ontex Group vs. Ackermans Van Haaren | Ontex Group vs. Sofina Socit Anonyme |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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