Correlation Between Grupo Ezentis and NBI Bearings
Can any of the company-specific risk be diversified away by investing in both Grupo Ezentis 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 Grupo Ezentis and NBI Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Ezentis SA and NBI Bearings Europe, you can compare the effects of market volatilities on Grupo Ezentis 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 Grupo Ezentis with a short position of NBI Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Ezentis and NBI Bearings.
Diversification Opportunities for Grupo Ezentis and NBI Bearings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and NBI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Ezentis 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 Grupo Ezentis 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 Grupo Ezentis 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 Grupo Ezentis i.e., Grupo Ezentis and NBI Bearings go up and down completely randomly.
Pair Corralation between Grupo Ezentis and NBI Bearings
Assuming the 90 days trading horizon Grupo Ezentis SA is expected to generate 3.62 times more return on investment than NBI Bearings. However, Grupo Ezentis is 3.62 times more volatile than NBI Bearings Europe. It trades about 0.03 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 8.94 in Grupo Ezentis SA on October 23, 2024 and sell it today you would earn a total of 1.06 from holding Grupo Ezentis SA or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Grupo Ezentis SA vs. NBI Bearings Europe
Performance |
| Timeline |
| Grupo Ezentis SA |
| NBI Bearings Europe |
Grupo Ezentis and NBI Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Ezentis and NBI Bearings
The main advantage of trading using opposite Grupo Ezentis and NBI Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Ezentis 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.| Grupo Ezentis vs. Indra A | Grupo Ezentis vs. All Iron Re | Grupo Ezentis vs. Naturhouse Health SA | Grupo Ezentis vs. VBARE Iberian Properties |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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