Correlation Between Groep Brussel and Nextensa
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Nextensa 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 Groep Brussel and Nextensa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groep Brussel Lambert and Nextensa NV, you can compare the effects of market volatilities on Groep Brussel and Nextensa 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 Groep Brussel with a short position of Nextensa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Nextensa.
Diversification Opportunities for Groep Brussel and Nextensa
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groep and Nextensa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Nextensa NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextensa NV and Groep Brussel 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 Groep Brussel Lambert are associated (or correlated) with Nextensa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextensa NV has no effect on the direction of Groep Brussel i.e., Groep Brussel and Nextensa go up and down completely randomly.
Pair Corralation between Groep Brussel and Nextensa
Assuming the 90 days trading horizon Groep Brussel Lambert is expected to generate 0.47 times more return on investment than Nextensa. However, Groep Brussel Lambert is 2.11 times less risky than Nextensa. It trades about 0.2 of its potential returns per unit of risk. Nextensa NV is currently generating about -0.35 per unit of risk. If you would invest 6,420 in Groep Brussel Lambert on September 13, 2024 and sell it today you would earn a total of 180.00 from holding Groep Brussel Lambert or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groep Brussel Lambert vs. Nextensa NV
Performance |
| Timeline |
| Groep Brussel Lambert |
| Nextensa NV |
Groep Brussel and Nextensa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and Nextensa
The main advantage of trading using opposite Groep Brussel and Nextensa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, Nextensa 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 Nextensa will offset losses from the drop in Nextensa's long position.| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel vs. Solvay SA |
| Nextensa vs. Exmar NV | Nextensa vs. Iep Invest | Nextensa vs. Unifiedpost Group SA | Nextensa vs. Montea CVA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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