Correlation Between Payton Planar and Greenyard
Can any of the company-specific risk be diversified away by investing in both Payton Planar and Greenyard 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 Payton Planar and Greenyard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payton Planar Magnetics and Greenyard NV, you can compare the effects of market volatilities on Payton Planar and Greenyard 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 Payton Planar with a short position of Greenyard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payton Planar and Greenyard.
Diversification Opportunities for Payton Planar and Greenyard
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payton and Greenyard is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Payton Planar Magnetics and Greenyard NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenyard NV and Payton Planar 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 Payton Planar Magnetics are associated (or correlated) with Greenyard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenyard NV has no effect on the direction of Payton Planar i.e., Payton Planar and Greenyard go up and down completely randomly.
Pair Corralation between Payton Planar and Greenyard
Assuming the 90 days trading horizon Payton Planar Magnetics is expected to generate 1.72 times more return on investment than Greenyard. However, Payton Planar is 1.72 times more volatile than Greenyard NV. It trades about -0.09 of its potential returns per unit of risk. Greenyard NV is currently generating about -0.38 per unit of risk. If you would invest 805.00 in Payton Planar Magnetics on September 4, 2024 and sell it today you would lose (55.00) from holding Payton Planar Magnetics or give up 6.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Payton Planar Magnetics vs. Greenyard NV
Performance |
| Timeline |
| Payton Planar Magnetics |
| Greenyard NV |
Payton Planar and Greenyard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payton Planar and Greenyard
The main advantage of trading using opposite Payton Planar and Greenyard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payton Planar position performs unexpectedly, Greenyard 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 Greenyard will offset losses from the drop in Greenyard's long position.| Payton Planar vs. Tessenderlo | Payton Planar vs. Jensen Group | Payton Planar vs. Melexis NV | Payton Planar vs. Sipef NV |
| Greenyard vs. Ontex Group NV | Greenyard vs. Exmar NV | Greenyard vs. Melexis NV | Greenyard vs. Biocartis Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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