Correlation Between IMCD NV and DEME Group
Can any of the company-specific risk be diversified away by investing in both IMCD NV and DEME Group 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 IMCD NV and DEME Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMCD NV and DEME Group NV, you can compare the effects of market volatilities on IMCD NV and DEME Group 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 IMCD NV with a short position of DEME Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMCD NV and DEME Group.
Diversification Opportunities for IMCD NV and DEME Group
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between IMCD and DEME is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding IMCD NV and DEME Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEME Group NV and IMCD 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 IMCD NV are associated (or correlated) with DEME Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEME Group NV has no effect on the direction of IMCD NV i.e., IMCD NV and DEME Group go up and down completely randomly.
Pair Corralation between IMCD NV and DEME Group
Assuming the 90 days trading horizon IMCD NV is expected to generate 3.94 times less return on investment than DEME Group. In addition to that, IMCD NV is 1.01 times more volatile than DEME Group NV. It trades about 0.01 of its total potential returns per unit of risk. DEME Group NV is currently generating about 0.04 per unit of volatility. If you would invest 11,867 in DEME Group NV on August 27, 2024 and sell it today you would earn a total of 2,813 from holding DEME Group NV or generate 23.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMCD NV vs. DEME Group NV
Performance |
| Timeline |
| IMCD NV |
| DEME Group NV |
IMCD NV and DEME Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMCD NV and DEME Group
The main advantage of trading using opposite IMCD NV and DEME Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMCD NV position performs unexpectedly, DEME Group 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 DEME Group will offset losses from the drop in DEME Group's long position.| IMCD NV vs. Wolters Kluwer NV | IMCD NV vs. Aalberts Industries NV | IMCD NV vs. ASM International NV | IMCD NV vs. ASR Nederland NV |
| DEME Group vs. Compagnie d Entreprises | DEME Group vs. DIeteren Group SA | DEME Group vs. Ackermans Van Haaren | DEME Group vs. Sofina Socit Anonyme |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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