Correlation Between Greenyard and Melexis NV
Can any of the company-specific risk be diversified away by investing in both Greenyard and Melexis 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 Greenyard and Melexis NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenyard NV and Melexis NV, you can compare the effects of market volatilities on Greenyard and Melexis 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 Greenyard with a short position of Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenyard and Melexis NV.
Diversification Opportunities for Greenyard and Melexis NV
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greenyard and Melexis is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Greenyard NV and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Greenyard 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 Greenyard NV are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Greenyard i.e., Greenyard and Melexis NV go up and down completely randomly.
Pair Corralation between Greenyard and Melexis NV
Assuming the 90 days trading horizon Greenyard NV is expected to generate 0.81 times more return on investment than Melexis NV. However, Greenyard NV is 1.23 times less risky than Melexis NV. It trades about -0.01 of its potential returns per unit of risk. Melexis NV is currently generating about -0.02 per unit of risk. If you would invest 595.00 in Greenyard NV on August 30, 2024 and sell it today you would lose (85.00) from holding Greenyard NV or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenyard NV vs. Melexis NV
Performance |
| Timeline |
| Greenyard NV |
| Melexis NV |
Greenyard and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenyard and Melexis NV
The main advantage of trading using opposite Greenyard and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenyard position performs unexpectedly, Melexis 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| Greenyard vs. Ontex Group NV | Greenyard vs. Exmar NV | Greenyard vs. Melexis NV | Greenyard vs. Biocartis Group NV |
| Melexis NV vs. Ackermans Van Haaren | Melexis NV vs. Sofina Socit Anonyme | Melexis NV vs. ageas SANV | Melexis NV vs. Barco NV |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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