Correlation Between Crescent and Wereldhav
Can any of the company-specific risk be diversified away by investing in both Crescent and Wereldhav 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 Wereldhav into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and Wereldhav B Sicafi, you can compare the effects of market volatilities on Crescent and Wereldhav 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 Wereldhav. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Wereldhav.
Diversification Opportunities for Crescent and Wereldhav
Poor diversification
The 3 months correlation between Crescent and Wereldhav is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Wereldhav B Sicafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhav B Sicafi 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 Wereldhav. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhav B Sicafi has no effect on the direction of Crescent i.e., Crescent and Wereldhav go up and down completely randomly.
Pair Corralation between Crescent and Wereldhav
Assuming the 90 days trading horizon Crescent NV is expected to generate 2.97 times more return on investment than Wereldhav. However, Crescent is 2.97 times more volatile than Wereldhav B Sicafi. It trades about 0.01 of its potential returns per unit of risk. Wereldhav B Sicafi is currently generating about -0.21 per unit of risk. If you would invest 1.00 in Crescent NV on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Crescent NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Crescent NV vs. Wereldhav B Sicafi
Performance |
| Timeline |
| Crescent NV |
| Wereldhav B Sicafi |
Crescent and Wereldhav Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Wereldhav
The main advantage of trading using opposite Crescent and Wereldhav positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Wereldhav 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 Wereldhav will offset losses from the drop in Wereldhav's long position.| Crescent vs. AGFA Gevaert NV | Crescent vs. Nyrstar NV | Crescent vs. Exmar NV | Crescent vs. EVS Broadcast Equipment |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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