Correlation Between NBI Bearings and Borges Agricultural
Can any of the company-specific risk be diversified away by investing in both NBI Bearings and Borges Agricultural 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 NBI Bearings and Borges Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Bearings Europe and Borges Agricultural Industrial, you can compare the effects of market volatilities on NBI Bearings and Borges Agricultural 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 NBI Bearings with a short position of Borges Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Bearings and Borges Agricultural.
Diversification Opportunities for NBI Bearings and Borges Agricultural
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NBI and Borges is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NBI Bearings Europe and Borges Agricultural Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borges Agricultural and NBI Bearings 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 NBI Bearings Europe are associated (or correlated) with Borges Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borges Agricultural has no effect on the direction of NBI Bearings i.e., NBI Bearings and Borges Agricultural go up and down completely randomly.
Pair Corralation between NBI Bearings and Borges Agricultural
Assuming the 90 days trading horizon NBI Bearings Europe is expected to under-perform the Borges Agricultural. In addition to that, NBI Bearings is 1.01 times more volatile than Borges Agricultural Industrial. It trades about -0.01 of its total potential returns per unit of risk. Borges Agricultural Industrial is currently generating about 0.02 per unit of volatility. If you would invest 270.00 in Borges Agricultural Industrial on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Borges Agricultural Industrial or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Bearings Europe vs. Borges Agricultural Industrial
Performance |
| Timeline |
| NBI Bearings Europe |
| Borges Agricultural |
NBI Bearings and Borges Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Bearings and Borges Agricultural
The main advantage of trading using opposite NBI Bearings and Borges Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Bearings position performs unexpectedly, Borges Agricultural 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 Borges Agricultural will offset losses from the drop in Borges Agricultural's long position.| NBI Bearings vs. Metrovacesa SA | NBI Bearings vs. Endurance Motive SA | NBI Bearings vs. Elecnor SA | NBI Bearings vs. Mapfre |
| Borges Agricultural vs. Pescanova SA | Borges Agricultural vs. Metrovacesa SA | Borges Agricultural vs. Elecnor SA | Borges Agricultural vs. Mapfre |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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