Correlation Between Melexis NV and Xior Student
Can any of the company-specific risk be diversified away by investing in both Melexis NV and Xior Student 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 Xior Student into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melexis NV and Xior Student Housing, you can compare the effects of market volatilities on Melexis NV and Xior Student 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 Xior Student. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melexis NV and Xior Student.
Diversification Opportunities for Melexis NV and Xior Student
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Melexis and Xior is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Xior Student Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xior Student Housing 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 Xior Student. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xior Student Housing has no effect on the direction of Melexis NV i.e., Melexis NV and Xior Student go up and down completely randomly.
Pair Corralation between Melexis NV and Xior Student
Assuming the 90 days trading horizon Melexis NV is expected to under-perform the Xior Student. In addition to that, Melexis NV is 1.57 times more volatile than Xior Student Housing. It trades about -0.22 of its total potential returns per unit of risk. Xior Student Housing is currently generating about -0.07 per unit of volatility. If you would invest 3,290 in Xior Student Housing on September 2, 2024 and sell it today you would lose (215.00) from holding Xior Student Housing or give up 6.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melexis NV vs. Xior Student Housing
Performance |
| Timeline |
| Melexis NV |
| Xior Student Housing |
Melexis NV and Xior Student Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melexis NV and Xior Student
The main advantage of trading using opposite Melexis NV and Xior Student positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melexis NV position performs unexpectedly, Xior Student 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 Xior Student will offset losses from the drop in Xior Student'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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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