Correlation Between Greenyard and Nextensa
Can any of the company-specific risk be diversified away by investing in both Greenyard 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 Greenyard and Nextensa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenyard NV and Nextensa NV, you can compare the effects of market volatilities on Greenyard 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 Greenyard with a short position of Nextensa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenyard and Nextensa.
Diversification Opportunities for Greenyard and Nextensa
Very poor diversification
The 3 months correlation between Greenyard and Nextensa is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Greenyard NV and Nextensa NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextensa 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 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 Greenyard i.e., Greenyard and Nextensa go up and down completely randomly.
Pair Corralation between Greenyard and Nextensa
Assuming the 90 days trading horizon Greenyard NV is expected to under-perform the Nextensa. In addition to that, Greenyard is 1.16 times more volatile than Nextensa NV. It trades about -0.01 of its total potential returns per unit of risk. Nextensa NV is currently generating about 0.0 per unit of volatility. If you would invest 4,232 in Nextensa NV on August 30, 2024 and sell it today you would lose (332.00) from holding Nextensa NV or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Greenyard NV vs. Nextensa NV
Performance |
| Timeline |
| Greenyard NV |
| Nextensa NV |
Greenyard and Nextensa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenyard and Nextensa
The main advantage of trading using opposite Greenyard and Nextensa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenyard 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.| Greenyard vs. Ontex Group NV | Greenyard vs. Exmar NV | Greenyard vs. Melexis NV | Greenyard vs. Biocartis Group NV |
| Nextensa vs. Exmar NV | Nextensa vs. Unifiedpost Group SA | Nextensa vs. Montea CVA | Nextensa vs. Belysse Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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