Correlation Between Ontex Group and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Ontex Group and NV Bekaert 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 Ontex Group and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontex Group NV and NV Bekaert SA, you can compare the effects of market volatilities on Ontex Group and NV Bekaert 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 Ontex Group with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontex Group and NV Bekaert.
Diversification Opportunities for Ontex Group and NV Bekaert
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ontex and BEKB is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ontex Group NV and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA and Ontex Group 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 Ontex Group NV are associated (or correlated) with NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Ontex Group i.e., Ontex Group and NV Bekaert go up and down completely randomly.
Pair Corralation between Ontex Group and NV Bekaert
Assuming the 90 days trading horizon Ontex Group NV is expected to generate 1.09 times more return on investment than NV Bekaert. However, Ontex Group is 1.09 times more volatile than NV Bekaert SA. It trades about -0.06 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.15 per unit of risk. If you would invest 904.00 in Ontex Group NV on September 1, 2024 and sell it today you would lose (107.00) from holding Ontex Group NV or give up 11.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontex Group NV vs. NV Bekaert SA
Performance |
| Timeline |
| Ontex Group NV |
| NV Bekaert SA |
Ontex Group and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontex Group and NV Bekaert
The main advantage of trading using opposite Ontex Group and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontex Group position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Ontex Group vs. Bpost NV | Ontex Group vs. Barco NV | Ontex Group vs. Biocartis Group NV | Ontex Group vs. ageas SANV |
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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 Managers module to screen money managers from public funds and ETFs managed around the world.
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