Correlation Between Crescent and Exmar NV
Can any of the company-specific risk be diversified away by investing in both Crescent and Exmar NV 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 Exmar NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and Exmar NV, you can compare the effects of market volatilities on Crescent and Exmar NV 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 Exmar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Exmar NV.
Diversification Opportunities for Crescent and Exmar NV
Very weak diversification
The 3 months correlation between Crescent and Exmar is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar 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 Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Crescent i.e., Crescent and Exmar NV go up and down completely randomly.
Pair Corralation between Crescent and Exmar NV
Assuming the 90 days trading horizon Crescent NV is expected to under-perform the Exmar NV. In addition to that, Crescent is 1.1 times more volatile than Exmar NV. It trades about -0.15 of its total potential returns per unit of risk. Exmar NV is currently generating about 0.18 per unit of volatility. If you would invest 771.00 in Exmar NV on September 1, 2024 and sell it today you would earn a total of 59.00 from holding Exmar NV or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. Exmar NV
Performance |
| Timeline |
| Crescent NV |
| Exmar NV |
Crescent and Exmar NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Exmar NV
The main advantage of trading using opposite Crescent and Exmar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Exmar NV 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 Exmar NV will offset losses from the drop in Exmar NV's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |