Correlation Between Crescent and Viohalco
Can any of the company-specific risk be diversified away by investing in both Crescent and Viohalco 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 Viohalco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and Viohalco SA, you can compare the effects of market volatilities on Crescent and Viohalco 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 Viohalco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Viohalco.
Diversification Opportunities for Crescent and Viohalco
Poor diversification
The 3 months correlation between Crescent and Viohalco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Viohalco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viohalco SA 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 Viohalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viohalco SA has no effect on the direction of Crescent i.e., Crescent and Viohalco go up and down completely randomly.
Pair Corralation between Crescent and Viohalco
Assuming the 90 days trading horizon Crescent NV is expected to under-perform the Viohalco. In addition to that, Crescent is 2.32 times more volatile than Viohalco SA. It trades about -0.05 of its total potential returns per unit of risk. Viohalco SA is currently generating about -0.08 per unit of volatility. If you would invest 580.00 in Viohalco SA on August 29, 2024 and sell it today you would lose (51.00) from holding Viohalco SA or give up 8.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. Viohalco SA
Performance |
| Timeline |
| Crescent NV |
| Viohalco SA |
Crescent and Viohalco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Viohalco
The main advantage of trading using opposite Crescent and Viohalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Viohalco 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 Viohalco will offset losses from the drop in Viohalco's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
| Viohalco vs. Cenergy Holdings SA | Viohalco vs. Van de Velde | Viohalco vs. NV Bekaert SA | Viohalco vs. Econocom Group SANV |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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