Correlation Between Floridienne and Barco NV
Can any of the company-specific risk be diversified away by investing in both Floridienne and Barco 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 Floridienne and Barco NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floridienne and Barco NV, you can compare the effects of market volatilities on Floridienne and Barco 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 Floridienne with a short position of Barco NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floridienne and Barco NV.
Diversification Opportunities for Floridienne and Barco NV
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Floridienne and Barco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Floridienne and Barco NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barco NV and Floridienne 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 Floridienne are associated (or correlated) with Barco NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barco NV has no effect on the direction of Floridienne i.e., Floridienne and Barco NV go up and down completely randomly.
Pair Corralation between Floridienne and Barco NV
Assuming the 90 days trading horizon Floridienne is expected to generate 0.87 times more return on investment than Barco NV. However, Floridienne is 1.15 times less risky than Barco NV. It trades about -0.05 of its potential returns per unit of risk. Barco NV is currently generating about -0.06 per unit of risk. If you would invest 69,807 in Floridienne on August 27, 2024 and sell it today you would lose (15,807) from holding Floridienne or give up 22.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Floridienne vs. Barco NV
Performance |
| Timeline |
| Floridienne |
| Barco NV |
Floridienne and Barco NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floridienne and Barco NV
The main advantage of trading using opposite Floridienne and Barco NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floridienne position performs unexpectedly, Barco 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 Barco NV will offset losses from the drop in Barco NV's long position.| Floridienne vs. Brederode SA | Floridienne vs. Compagnie du Bois | Floridienne vs. Ackermans Van Haaren | Floridienne vs. Sofina Socit Anonyme |
| Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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