Correlation Between Roularta and Exmar NV
Can any of the company-specific risk be diversified away by investing in both Roularta and Exmar NV 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 Roularta and Exmar NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roularta and Exmar NV, you can compare the effects of market volatilities on Roularta and Exmar NV 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 Roularta with a short position of Exmar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roularta and Exmar NV.
Diversification Opportunities for Roularta and Exmar NV
Significant diversification
The 3 months correlation between Roularta and Exmar is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Roularta and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV and Roularta 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 Roularta are associated (or correlated) with Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Roularta i.e., Roularta and Exmar NV go up and down completely randomly.
Pair Corralation between Roularta and Exmar NV
Assuming the 90 days trading horizon Roularta is expected to under-perform the Exmar NV. But the stock apears to be less risky and, when comparing its historical volatility, Roularta is 1.64 times less risky than Exmar NV. The stock trades about -0.01 of its potential returns per unit of risk. The Exmar NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 523.00 in Exmar NV on August 29, 2024 and sell it today you would earn a total of 297.00 from holding Exmar NV or generate 56.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.37% |
| Values | Daily Returns |
Roularta vs. Exmar NV
Performance |
| Timeline |
| Roularta |
| Exmar NV |
Roularta and Exmar NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roularta and Exmar NV
The main advantage of trading using opposite Roularta and Exmar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roularta position performs unexpectedly, Exmar NV 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 Exmar NV will offset losses from the drop in Exmar NV's long position.| Roularta vs. Tessenderlo | Roularta vs. EVS Broadcast Equipment | Roularta vs. Sipef NV | Roularta vs. Exmar NV |
| Exmar NV vs. EVS Broadcast Equipment | Exmar NV vs. NV Bekaert SA | Exmar NV vs. Tessenderlo | Exmar NV vs. Melexis 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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