Correlation Between Crescent and Sipef NV
Can any of the company-specific risk be diversified away by investing in both Crescent and Sipef 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 Sipef 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 Sipef NV, you can compare the effects of market volatilities on Crescent and Sipef 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 Sipef NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Sipef NV.
Diversification Opportunities for Crescent and Sipef NV
Excellent diversification
The 3 months correlation between Crescent and Sipef is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Sipef NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sipef 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 Sipef NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sipef NV has no effect on the direction of Crescent i.e., Crescent and Sipef NV go up and down completely randomly.
Pair Corralation between Crescent and Sipef NV
Assuming the 90 days trading horizon Crescent NV is expected to generate 4.36 times more return on investment than Sipef NV. However, Crescent is 4.36 times more volatile than Sipef NV. It trades about 0.03 of its potential returns per unit of risk. Sipef NV is currently generating about 0.04 per unit of risk. If you would invest 0.96 in Crescent NV on September 2, 2024 and sell it today you would earn a total of 0.04 from holding Crescent NV or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. Sipef NV
Performance |
| Timeline |
| Crescent NV |
| Sipef NV |
Crescent and Sipef NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Sipef NV
The main advantage of trading using opposite Crescent and Sipef NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Sipef 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 Sipef NV will offset losses from the drop in Sipef NV's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
| Sipef NV vs. Tessenderlo | Sipef NV vs. EVS Broadcast Equipment | Sipef NV vs. Ackermans Van Haaren | Sipef 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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