Correlation Between NV Nederlandsche and Lavide Holding
Can any of the company-specific risk be diversified away by investing in both NV Nederlandsche and Lavide Holding 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 Lavide Holding 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 Lavide Holding NV, you can compare the effects of market volatilities on NV Nederlandsche and Lavide Holding 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 Lavide Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Nederlandsche and Lavide Holding.
Diversification Opportunities for NV Nederlandsche and Lavide Holding
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NEDAP and Lavide is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NV Nederlandsche Apparatenfabr and Lavide Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavide Holding 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 Lavide Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavide Holding NV has no effect on the direction of NV Nederlandsche i.e., NV Nederlandsche and Lavide Holding go up and down completely randomly.
Pair Corralation between NV Nederlandsche and Lavide Holding
Assuming the 90 days trading horizon NV Nederlandsche Apparatenfabriek is expected to generate 0.45 times more return on investment than Lavide Holding. However, NV Nederlandsche Apparatenfabriek is 2.23 times less risky than Lavide Holding. It trades about 0.14 of its potential returns per unit of risk. Lavide Holding NV is currently generating about 0.05 per unit of risk. If you would invest 5,780 in NV Nederlandsche Apparatenfabriek on November 28, 2024 and sell it today you would earn a total of 200.00 from holding NV Nederlandsche Apparatenfabriek or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NV Nederlandsche Apparatenfabr vs. Lavide Holding NV
Performance |
| Timeline |
| NV Nederlandsche App |
| Lavide Holding NV |
NV Nederlandsche and Lavide Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NV Nederlandsche and Lavide Holding
The main advantage of trading using opposite NV Nederlandsche and Lavide Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Nederlandsche position performs unexpectedly, Lavide Holding 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 Lavide Holding will offset losses from the drop in Lavide Holding's long position.| NV Nederlandsche vs. TKH Group NV | NV Nederlandsche vs. Aalberts Industries NV | NV Nederlandsche vs. Kendrion NV | NV Nederlandsche vs. Amsterdam Commodities NV |
| Lavide Holding vs. Sligro Food Group | Lavide Holding vs. AMG Advanced Metallurgical | Lavide Holding vs. Universal Music Group | Lavide Holding vs. Reinet Investments SCA |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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