Correlation Between Iffe Futura and NBI Bearings
Can any of the company-specific risk be diversified away by investing in both Iffe Futura and NBI Bearings 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 Iffe Futura and NBI Bearings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iffe Futura SA and NBI Bearings Europe, you can compare the effects of market volatilities on Iffe Futura and NBI Bearings 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 Iffe Futura with a short position of NBI Bearings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iffe Futura and NBI Bearings.
Diversification Opportunities for Iffe Futura and NBI Bearings
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iffe and NBI is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Iffe Futura SA and NBI Bearings Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBI Bearings Europe and Iffe Futura 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 Iffe Futura SA are associated (or correlated) with NBI Bearings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBI Bearings Europe has no effect on the direction of Iffe Futura i.e., Iffe Futura and NBI Bearings go up and down completely randomly.
Pair Corralation between Iffe Futura and NBI Bearings
Assuming the 90 days trading horizon Iffe Futura SA is expected to generate 1.68 times more return on investment than NBI Bearings. However, Iffe Futura is 1.68 times more volatile than NBI Bearings Europe. It trades about 0.02 of its potential returns per unit of risk. NBI Bearings Europe is currently generating about -0.02 per unit of risk. If you would invest 58.00 in Iffe Futura SA on October 23, 2024 and sell it today you would earn a total of 9.00 from holding Iffe Futura SA or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iffe Futura SA vs. NBI Bearings Europe
Performance |
| Timeline |
| Iffe Futura SA |
| NBI Bearings Europe |
Iffe Futura and NBI Bearings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iffe Futura and NBI Bearings
The main advantage of trading using opposite Iffe Futura and NBI Bearings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iffe Futura position performs unexpectedly, NBI Bearings 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 NBI Bearings will offset losses from the drop in NBI Bearings' long position.| Iffe Futura vs. Endesa SA | Iffe Futura vs. All Iron Re | Iffe Futura vs. VBARE Iberian Properties | Iffe Futura vs. Naturhouse Health SA |
| NBI Bearings vs. Plasticos Compuestos SA | NBI Bearings vs. Atresmedia Corporacin de | NBI Bearings vs. Borges Agricultural Industrial | NBI Bearings vs. Cellnex Telecom SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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