Correlation Between Exmar NV and VGP NV
Can any of the company-specific risk be diversified away by investing in both Exmar NV and VGP NV 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 VGP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exmar NV and VGP NV, you can compare the effects of market volatilities on Exmar NV and VGP NV 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 VGP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exmar NV and VGP NV.
Diversification Opportunities for Exmar NV and VGP NV
Poor diversification
The 3 months correlation between Exmar and VGP is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP 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 VGP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGP NV has no effect on the direction of Exmar NV i.e., Exmar NV and VGP NV go up and down completely randomly.
Pair Corralation between Exmar NV and VGP NV
Assuming the 90 days trading horizon Exmar NV is expected to generate 1.23 times more return on investment than VGP NV. However, Exmar NV is 1.23 times more volatile than VGP NV. It trades about 0.08 of its potential returns per unit of risk. VGP NV is currently generating about 0.01 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. VGP NV
Performance |
| Timeline |
| Exmar NV |
| VGP NV |
Exmar NV and VGP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exmar NV and VGP NV
The main advantage of trading using opposite Exmar NV and VGP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exmar NV position performs unexpectedly, VGP NV 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 VGP NV will offset losses from the drop in VGP NV's long position.| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis NV |
| VGP NV vs. Warehouses de Pauw | VGP NV vs. Sofina Socit Anonyme | VGP NV vs. Aedifica | VGP NV vs. Xior Student Housing |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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