Correlation Between Melexis NV and Jensen
Can any of the company-specific risk be diversified away by investing in both Melexis NV and Jensen 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 Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and Jensen Group, you can compare the effects of market volatilities on Melexis NV and Jensen 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 Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and Jensen.
Diversification Opportunities for Melexis NV and Jensen
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Melexis and Jensen is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group 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 Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Melexis NV i.e., Melexis NV and Jensen go up and down completely randomly.
Pair Corralation between Melexis NV and Jensen
Assuming the 90 days trading horizon Melexis NV is expected to under-perform the Jensen. In addition to that, Melexis NV is 1.39 times more volatile than Jensen Group. It trades about -0.28 of its total potential returns per unit of risk. Jensen Group is currently generating about 0.07 per unit of volatility. If you would invest 4,180 in Jensen Group on August 29, 2024 and sell it today you would earn a total of 120.00 from holding Jensen Group or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melexis NV vs. Jensen Group
Performance |
| Timeline |
| Melexis NV |
| Jensen Group |
Melexis NV and Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melexis NV and Jensen
The main advantage of trading using opposite Melexis NV and Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV position performs unexpectedly, Jensen 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 Jensen will offset losses from the drop in Jensen'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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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