Correlation Between Payton Planar and Tessenderlo
Can any of the company-specific risk be diversified away by investing in both Payton Planar and Tessenderlo 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 Tessenderlo 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 Tessenderlo, you can compare the effects of market volatilities on Payton Planar and Tessenderlo 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 Tessenderlo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payton Planar and Tessenderlo.
Diversification Opportunities for Payton Planar and Tessenderlo
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Payton and Tessenderlo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Payton Planar Magnetics and Tessenderlo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tessenderlo 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 Tessenderlo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tessenderlo has no effect on the direction of Payton Planar i.e., Payton Planar and Tessenderlo go up and down completely randomly.
Pair Corralation between Payton Planar and Tessenderlo
Assuming the 90 days trading horizon Payton Planar Magnetics is expected to generate 1.84 times more return on investment than Tessenderlo. However, Payton Planar is 1.84 times more volatile than Tessenderlo. It trades about 0.01 of its potential returns per unit of risk. Tessenderlo is currently generating about -0.05 per unit of risk. If you would invest 860.00 in Payton Planar Magnetics on August 27, 2024 and sell it today you would lose (20.00) from holding Payton Planar Magnetics or give up 2.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.53% |
| Values | Daily Returns |
Payton Planar Magnetics vs. Tessenderlo
Performance |
| Timeline |
| Payton Planar Magnetics |
| Tessenderlo |
Payton Planar and Tessenderlo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payton Planar and Tessenderlo
The main advantage of trading using opposite Payton Planar and Tessenderlo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payton Planar position performs unexpectedly, Tessenderlo 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 Tessenderlo will offset losses from the drop in Tessenderlo's long position.| Payton Planar vs. Tessenderlo | Payton Planar vs. Jensen Group | Payton Planar vs. Melexis NV | Payton Planar vs. Sipef NV |
| Tessenderlo vs. Ackermans Van Haaren | Tessenderlo vs. NV Bekaert SA | Tessenderlo vs. Groep Brussel Lambert | Tessenderlo vs. Tubize Fin |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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