Correlation Between Montea CVA and Exmar NV
Can any of the company-specific risk be diversified away by investing in both Montea CVA and Exmar NV 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 Montea CVA and Exmar NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montea CVA and Exmar NV, you can compare the effects of market volatilities on Montea CVA and Exmar NV 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 Montea CVA with a short position of Exmar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montea CVA and Exmar NV.
Diversification Opportunities for Montea CVA and Exmar NV
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Montea and Exmar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Montea CVA and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV and Montea CVA 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 Montea CVA are associated (or correlated) with Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Montea CVA i.e., Montea CVA and Exmar NV go up and down completely randomly.
Pair Corralation between Montea CVA and Exmar NV
Assuming the 90 days trading horizon Montea CVA is expected to under-perform the Exmar NV. But the stock apears to be less risky and, when comparing its historical volatility, Montea CVA is 1.65 times less risky than Exmar NV. The stock trades about -0.14 of its potential returns per unit of risk. The Exmar NV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Exmar NV on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Exmar NV or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montea CVA vs. Exmar NV
Performance |
| Timeline |
| Montea CVA |
| Exmar NV |
Montea CVA and Exmar NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montea CVA and Exmar NV
The main advantage of trading using opposite Montea CVA and Exmar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montea CVA position performs unexpectedly, Exmar NV 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 Exmar NV will offset losses from the drop in Exmar NV's long position.| Montea CVA vs. Aedifica | Montea CVA vs. Cofinimmo SA | Montea CVA vs. VGP NV | Montea CVA vs. Sofina Socit Anonyme |
| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |