Correlation Between Melexis NV and Argen X
Can any of the company-specific risk be diversified away by investing in both Melexis NV and Argen X 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 Melexis NV and Argen X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and Argen X, you can compare the effects of market volatilities on Melexis NV and Argen X 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 Melexis NV with a short position of Argen X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and Argen X.
Diversification Opportunities for Melexis NV and Argen X
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Melexis and Argen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Argen X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argen X and Melexis 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 Melexis NV are associated (or correlated) with Argen X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argen X has no effect on the direction of Melexis NV i.e., Melexis NV and Argen X go up and down completely randomly.
Pair Corralation between Melexis NV and Argen X
Assuming the 90 days trading horizon Melexis NV is expected to generate 1.47 times more return on investment than Argen X. However, Melexis NV is 1.47 times more volatile than Argen X. It trades about 0.09 of its potential returns per unit of risk. Argen X is currently generating about 0.1 per unit of risk. If you would invest 5,705 in Melexis NV on October 26, 2024 and sell it today you would earn a total of 375.00 from holding Melexis NV or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melexis NV vs. Argen X
Performance |
| Timeline |
| Melexis NV |
| Argen X |
Melexis NV and Argen X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melexis NV and Argen X
The main advantage of trading using opposite Melexis NV and Argen X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV position performs unexpectedly, Argen X 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 Argen X will offset losses from the drop in Argen X's long position.| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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