Correlation Between NV Nederlandsche and Ease2pay
Can any of the company-specific risk be diversified away by investing in both NV Nederlandsche and Ease2pay 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 NV Nederlandsche and Ease2pay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NV Nederlandsche Apparatenfabriek and Ease2pay NV, you can compare the effects of market volatilities on NV Nederlandsche and Ease2pay 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 NV Nederlandsche with a short position of Ease2pay. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Nederlandsche and Ease2pay.
Diversification Opportunities for NV Nederlandsche and Ease2pay
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEDAP and Ease2pay is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NV Nederlandsche Apparatenfabr and Ease2pay NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ease2pay NV and NV Nederlandsche 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 NV Nederlandsche Apparatenfabriek are associated (or correlated) with Ease2pay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ease2pay NV has no effect on the direction of NV Nederlandsche i.e., NV Nederlandsche and Ease2pay go up and down completely randomly.
Pair Corralation between NV Nederlandsche and Ease2pay
Assuming the 90 days trading horizon NV Nederlandsche Apparatenfabriek is expected to generate 0.27 times more return on investment than Ease2pay. However, NV Nederlandsche Apparatenfabriek is 3.74 times less risky than Ease2pay. It trades about -0.02 of its potential returns per unit of risk. Ease2pay NV is currently generating about -0.01 per unit of risk. If you would invest 5,718 in NV Nederlandsche Apparatenfabriek on August 27, 2024 and sell it today you would lose (478.00) from holding NV Nederlandsche Apparatenfabriek or give up 8.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NV Nederlandsche Apparatenfabr vs. Ease2pay NV
Performance |
| Timeline |
| NV Nederlandsche App |
| Ease2pay NV |
NV Nederlandsche and Ease2pay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Nederlandsche and Ease2pay
The main advantage of trading using opposite NV Nederlandsche and Ease2pay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Nederlandsche position performs unexpectedly, Ease2pay 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 Ease2pay will offset losses from the drop in Ease2pay's long position.| NV Nederlandsche vs. TKH Group NV | NV Nederlandsche vs. Aalberts Industries NV | NV Nederlandsche vs. Amsterdam Commodities NV | NV Nederlandsche vs. iShares SP 500 |
| Ease2pay vs. Ctac NV | Ease2pay vs. Kendrion NV | Ease2pay vs. NV Nederlandsche Apparatenfabriek | Ease2pay vs. iShares SP 500 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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