Correlation Between IMCD NV and Marel Hf
Can any of the company-specific risk be diversified away by investing in both IMCD NV and Marel Hf 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 Marel Hf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IMCD NV and Marel hf, you can compare the effects of market volatilities on IMCD NV and Marel Hf 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 Marel Hf. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMCD NV and Marel Hf.
Diversification Opportunities for IMCD NV and Marel Hf
Pay attention - limited upside
The 3 months correlation between IMCD and Marel is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding IMCD NV and Marel hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marel hf 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 Marel Hf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marel hf has no effect on the direction of IMCD NV i.e., IMCD NV and Marel Hf go up and down completely randomly.
Pair Corralation between IMCD NV and Marel Hf
Assuming the 90 days trading horizon IMCD NV is expected to under-perform the Marel Hf. In addition to that, IMCD NV is 1.24 times more volatile than Marel hf. It trades about -0.03 of its total potential returns per unit of risk. Marel hf is currently generating about 0.29 per unit of volatility. If you would invest 49,900 in Marel hf on September 2, 2024 and sell it today you would earn a total of 13,500 from holding Marel hf or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IMCD NV vs. Marel hf
Performance |
| Timeline |
| IMCD NV |
| Marel hf |
IMCD NV and Marel Hf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMCD NV and Marel Hf
The main advantage of trading using opposite IMCD NV and Marel Hf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMCD NV position performs unexpectedly, Marel Hf 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 Marel Hf will offset losses from the drop in Marel Hf'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 |
| Marel Hf vs. Alvotech | Marel Hf vs. Kvika banki hf | Marel Hf vs. Icelandair Group hf | Marel Hf vs. Arion banki hf |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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