Correlation Between Melexis NV and Banimmo SA
Can any of the company-specific risk be diversified away by investing in both Melexis NV and Banimmo SA 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 Banimmo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and Banimmo SA, you can compare the effects of market volatilities on Melexis NV and Banimmo SA 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 Banimmo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and Banimmo SA.
Diversification Opportunities for Melexis NV and Banimmo SA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Melexis and Banimmo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Banimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banimmo SA 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 Banimmo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banimmo SA has no effect on the direction of Melexis NV i.e., Melexis NV and Banimmo SA go up and down completely randomly.
Pair Corralation between Melexis NV and Banimmo SA
Assuming the 90 days trading horizon Melexis NV is expected to under-perform the Banimmo SA. In addition to that, Melexis NV is 1.41 times more volatile than Banimmo SA. It trades about -0.06 of its total potential returns per unit of risk. Banimmo SA is currently generating about -0.05 per unit of volatility. If you would invest 358.00 in Banimmo SA on September 12, 2024 and sell it today you would lose (68.00) from holding Banimmo SA or give up 18.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Melexis NV vs. Banimmo SA
Performance |
| Timeline |
| Melexis NV |
| Banimmo SA |
Melexis NV and Banimmo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melexis NV and Banimmo SA
The main advantage of trading using opposite Melexis NV and Banimmo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV position performs unexpectedly, Banimmo SA 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 Banimmo SA will offset losses from the drop in Banimmo SA'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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