Correlation Between Prosus NV and NX Filtration
Can any of the company-specific risk be diversified away by investing in both Prosus NV and NX Filtration 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 Prosus NV and NX Filtration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV and NX Filtration Holding, you can compare the effects of market volatilities on Prosus NV and NX Filtration 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 Prosus NV with a short position of NX Filtration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and NX Filtration.
Diversification Opportunities for Prosus NV and NX Filtration
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosus and NXFIL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV and NX Filtration Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NX Filtration Holding and Prosus NV 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 Prosus NV are associated (or correlated) with NX Filtration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NX Filtration Holding has no effect on the direction of Prosus NV i.e., Prosus NV and NX Filtration go up and down completely randomly.
Pair Corralation between Prosus NV and NX Filtration
Assuming the 90 days trading horizon Prosus NV is expected to generate 0.86 times more return on investment than NX Filtration. However, Prosus NV is 1.17 times less risky than NX Filtration. It trades about 0.08 of its potential returns per unit of risk. NX Filtration Holding is currently generating about -0.05 per unit of risk. If you would invest 3,596 in Prosus NV on August 26, 2024 and sell it today you would earn a total of 201.00 from holding Prosus NV or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus NV vs. NX Filtration Holding
Performance |
| Timeline |
| Prosus NV |
| NX Filtration Holding |
Prosus NV and NX Filtration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and NX Filtration
The main advantage of trading using opposite Prosus NV and NX Filtration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, NX Filtration 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 NX Filtration will offset losses from the drop in NX Filtration's long position.| Prosus NV vs. Just Eat Takeaway | Prosus NV vs. ASML Holding NV | Prosus NV vs. Koninklijke Ahold Delhaize | Prosus NV vs. Adyen NV |
| NX Filtration vs. CM NV | NX Filtration vs. TKH Group NV | NX Filtration vs. Ebusco Holding BV | NX Filtration vs. Avantium Holding BV |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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