Correlation Between NBI Bearings and Catenon SA
Can any of the company-specific risk be diversified away by investing in both NBI Bearings and Catenon SA 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 Catenon SA 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 Catenon SA, you can compare the effects of market volatilities on NBI Bearings and Catenon SA 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 Catenon SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Bearings and Catenon SA.
Diversification Opportunities for NBI Bearings and Catenon SA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NBI and Catenon is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding NBI Bearings Europe and Catenon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catenon SA 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 Catenon SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catenon SA has no effect on the direction of NBI Bearings i.e., NBI Bearings and Catenon SA go up and down completely randomly.
Pair Corralation between NBI Bearings and Catenon SA
Assuming the 90 days trading horizon NBI Bearings Europe is expected to under-perform the Catenon SA. But the stock apears to be less risky and, when comparing its historical volatility, NBI Bearings Europe is 3.37 times less risky than Catenon SA. The stock trades about -0.02 of its potential returns per unit of risk. The Catenon SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 77.00 in Catenon SA on November 3, 2024 and sell it today you would lose (13.00) from holding Catenon SA or give up 16.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Bearings Europe vs. Catenon SA
Performance |
| Timeline |
| NBI Bearings Europe |
| Catenon SA |
NBI Bearings and Catenon SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Bearings and Catenon SA
The main advantage of trading using opposite NBI Bearings and Catenon SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Bearings position performs unexpectedly, Catenon SA 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 Catenon SA will offset losses from the drop in Catenon SA's long position.| NBI Bearings vs. Metrovacesa SA | NBI Bearings vs. Elecnor SA | NBI Bearings vs. Mapfre | NBI Bearings vs. Tander Inversiones SOCIMI |
| Catenon SA vs. Home Capital Rentals | Catenon SA vs. Borges Agricultural Industrial | Catenon SA vs. Media Investment Optimization | Catenon SA vs. Azaria Rental SOCIMI |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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