Correlation Between Ontex Group and Econocom Group
Can any of the company-specific risk be diversified away by investing in both Ontex Group and Econocom Group 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 Econocom Group 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 Econocom Group SANV, you can compare the effects of market volatilities on Ontex Group and Econocom Group 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 Econocom Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontex Group and Econocom Group.
Diversification Opportunities for Ontex Group and Econocom Group
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ontex and Econocom is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ontex Group NV and Econocom Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Econocom Group SANV 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 Econocom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Econocom Group SANV has no effect on the direction of Ontex Group i.e., Ontex Group and Econocom Group go up and down completely randomly.
Pair Corralation between Ontex Group and Econocom Group
Assuming the 90 days trading horizon Ontex Group NV is expected to generate 0.73 times more return on investment than Econocom Group. However, Ontex Group NV is 1.37 times less risky than Econocom Group. It trades about 0.02 of its potential returns per unit of risk. Econocom Group SANV is currently generating about -0.03 per unit of risk. If you would invest 746.00 in Ontex Group NV on November 5, 2024 and sell it today you would earn a total of 72.00 from holding Ontex Group NV or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontex Group NV vs. Econocom Group SANV
Performance |
| Timeline |
| Ontex Group NV |
| Econocom Group SANV |
Ontex Group and Econocom Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontex Group and Econocom Group
The main advantage of trading using opposite Ontex Group and Econocom Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontex Group position performs unexpectedly, Econocom Group 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 Econocom Group will offset losses from the drop in Econocom Group'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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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