Correlation Between Montea CVA and Crescent
Can any of the company-specific risk be diversified away by investing in both Montea CVA and Crescent 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 Crescent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montea CVA and Crescent NV, you can compare the effects of market volatilities on Montea CVA and Crescent 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 Crescent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montea CVA and Crescent.
Diversification Opportunities for Montea CVA and Crescent
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Montea and Crescent is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Montea CVA and Crescent NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent 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 Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent NV has no effect on the direction of Montea CVA i.e., Montea CVA and Crescent go up and down completely randomly.
Pair Corralation between Montea CVA and Crescent
Assuming the 90 days trading horizon Montea CVA is expected to under-perform the Crescent. But the stock apears to be less risky and, when comparing its historical volatility, Montea CVA is 2.57 times less risky than Crescent. The stock trades about -0.25 of its potential returns per unit of risk. The Crescent NV is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1.16 in Crescent NV on September 12, 2024 and sell it today you would lose (0.14) from holding Crescent NV or give up 12.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Montea CVA vs. Crescent NV
Performance |
| Timeline |
| Montea CVA |
| Crescent NV |
Montea CVA and Crescent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montea CVA and Crescent
The main advantage of trading using opposite Montea CVA and Crescent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montea CVA position performs unexpectedly, Crescent 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 Crescent will offset losses from the drop in Crescent's long position.| Montea CVA vs. Warehouses de Pauw | Montea CVA vs. Warehouses Estates Belgium | Montea CVA vs. Exmar NV | Montea CVA vs. Iep Invest |
| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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