Correlation Between Crescent and AGFA Gevaert
Can any of the company-specific risk be diversified away by investing in both Crescent and AGFA Gevaert 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 Crescent and AGFA Gevaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and AGFA Gevaert NV, you can compare the effects of market volatilities on Crescent and AGFA Gevaert 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 Crescent with a short position of AGFA Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and AGFA Gevaert.
Diversification Opportunities for Crescent and AGFA Gevaert
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crescent and AGFA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and AGFA Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFA Gevaert NV and Crescent 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 Crescent NV are associated (or correlated) with AGFA Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFA Gevaert NV has no effect on the direction of Crescent i.e., Crescent and AGFA Gevaert go up and down completely randomly.
Pair Corralation between Crescent and AGFA Gevaert
Assuming the 90 days trading horizon Crescent NV is expected to generate 1.59 times more return on investment than AGFA Gevaert. However, Crescent is 1.59 times more volatile than AGFA Gevaert NV. It trades about 0.06 of its potential returns per unit of risk. AGFA Gevaert NV is currently generating about -0.03 per unit of risk. If you would invest 0.74 in Crescent NV on September 1, 2024 and sell it today you would earn a total of 0.26 from holding Crescent NV or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. AGFA Gevaert NV
Performance |
| Timeline |
| Crescent NV |
| AGFA Gevaert NV |
Crescent and AGFA Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and AGFA Gevaert
The main advantage of trading using opposite Crescent and AGFA Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, AGFA Gevaert 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 AGFA Gevaert will offset losses from the drop in AGFA Gevaert's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
| AGFA Gevaert vs. NV Bekaert SA | AGFA Gevaert vs. Barco NV | AGFA Gevaert vs. EVS Broadcast Equipment | AGFA Gevaert vs. Nyrstar NV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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