Correlation Between Exmar NV and Roularta
Can any of the company-specific risk be diversified away by investing in both Exmar NV and Roularta 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 Roularta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and Roularta, you can compare the effects of market volatilities on Exmar NV and Roularta 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 Roularta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and Roularta.
Diversification Opportunities for Exmar NV and Roularta
Average diversification
The 3 months correlation between Exmar and Roularta is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and Roularta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roularta 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 Roularta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roularta has no effect on the direction of Exmar NV i.e., Exmar NV and Roularta go up and down completely randomly.
Pair Corralation between Exmar NV and Roularta
Assuming the 90 days trading horizon Exmar NV is expected to generate 1.34 times more return on investment than Roularta. However, Exmar NV is 1.34 times more volatile than Roularta. It trades about 0.08 of its potential returns per unit of risk. Roularta 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 | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Exmar NV vs. Roularta
Performance |
| Timeline |
| Exmar NV |
| Roularta |
Exmar NV and Roularta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and Roularta
The main advantage of trading using opposite Exmar NV and Roularta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV position performs unexpectedly, Roularta 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 Roularta will offset losses from the drop in Roularta's long position.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis NV |
| Roularta vs. Tessenderlo | Roularta vs. EVS Broadcast Equipment | Roularta vs. Sipef NV | Roularta vs. Exmar NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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