Correlation Between Fagron NV and Celyad SA
Can any of the company-specific risk be diversified away by investing in both Fagron NV and Celyad SA 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 Fagron NV and Celyad SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fagron NV and Celyad SA, you can compare the effects of market volatilities on Fagron NV and Celyad SA 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 Fagron NV with a short position of Celyad SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fagron NV and Celyad SA.
Diversification Opportunities for Fagron NV and Celyad SA
Good diversification
The 3 months correlation between Fagron and Celyad is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fagron NV and Celyad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celyad SA and Fagron 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 Fagron NV are associated (or correlated) with Celyad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celyad SA has no effect on the direction of Fagron NV i.e., Fagron NV and Celyad SA go up and down completely randomly.
Pair Corralation between Fagron NV and Celyad SA
Assuming the 90 days trading horizon Fagron NV is expected to generate 16.7 times less return on investment than Celyad SA. But when comparing it to its historical volatility, Fagron NV is 8.65 times less risky than Celyad SA. It trades about 0.04 of its potential returns per unit of risk. Celyad SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Celyad SA on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Celyad SA or generate 102.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Fagron NV vs. Celyad SA
Performance |
| Timeline |
| Fagron NV |
| Celyad SA |
Fagron NV and Celyad SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fagron NV and Celyad SA
The main advantage of trading using opposite Fagron NV and Celyad SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fagron NV position performs unexpectedly, Celyad SA 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 Celyad SA will offset losses from the drop in Celyad SA's long position.| Fagron NV vs. Tessenderlo | Fagron NV vs. NV Bekaert SA | Fagron NV vs. Ontex Group NV | Fagron NV vs. Argen X |
| Celyad SA vs. Retail Estates | Celyad SA vs. Shurgard Self Storage | Celyad SA vs. Onward Medical NV | Celyad SA vs. Vastned Retail Belgium |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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