Correlation Between Sipef NV and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Sipef NV and NV Bekaert 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 Sipef NV and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sipef NV and NV Bekaert SA, you can compare the effects of market volatilities on Sipef NV and NV Bekaert 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 Sipef NV with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sipef NV and NV Bekaert.
Diversification Opportunities for Sipef NV and NV Bekaert
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sipef and BEKB is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sipef NV and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA and Sipef 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 Sipef NV are associated (or correlated) with NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Sipef NV i.e., Sipef NV and NV Bekaert go up and down completely randomly.
Pair Corralation between Sipef NV and NV Bekaert
Assuming the 90 days trading horizon Sipef NV is expected to generate 0.39 times more return on investment than NV Bekaert. However, Sipef NV is 2.53 times less risky than NV Bekaert. It trades about 0.05 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.11 per unit of risk. If you would invest 5,680 in Sipef NV on August 27, 2024 and sell it today you would earn a total of 40.00 from holding Sipef NV or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sipef NV vs. NV Bekaert SA
Performance |
| Timeline |
| Sipef NV |
| NV Bekaert SA |
Sipef NV and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sipef NV and NV Bekaert
The main advantage of trading using opposite Sipef NV and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sipef NV position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Sipef NV vs. Tessenderlo | Sipef NV vs. EVS Broadcast Equipment | Sipef NV vs. Ackermans Van Haaren | Sipef NV vs. Melexis NV |
| NV Bekaert vs. Solvay SA | NV Bekaert vs. Ackermans Van Haaren | NV Bekaert vs. Barco NV | NV Bekaert vs. Etablissementen Franz Colruyt |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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