Correlation Between Sipef NV and Jensen
Can any of the company-specific risk be diversified away by investing in both Sipef NV and Jensen 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 Jensen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sipef NV and Jensen Group, you can compare the effects of market volatilities on Sipef NV and Jensen 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 Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sipef NV and Jensen.
Diversification Opportunities for Sipef NV and Jensen
Good diversification
The 3 months correlation between Sipef and Jensen is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sipef NV and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group 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 Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of Sipef NV i.e., Sipef NV and Jensen go up and down completely randomly.
Pair Corralation between Sipef NV and Jensen
Assuming the 90 days trading horizon Sipef NV is expected to generate 0.45 times more return on investment than Jensen. However, Sipef NV is 2.2 times less risky than Jensen. It trades about 0.03 of its potential returns per unit of risk. Jensen Group is currently generating about -0.06 per unit of risk. If you would invest 5,580 in Sipef NV on August 25, 2024 and sell it today you would earn a total of 80.00 from holding Sipef NV or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Sipef NV vs. Jensen Group
Performance |
| Timeline |
| Sipef NV |
| Jensen Group |
Sipef NV and Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sipef NV and Jensen
The main advantage of trading using opposite Sipef NV and Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sipef NV position performs unexpectedly, Jensen 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 Jensen will offset losses from the drop in Jensen's long position.| Sipef NV vs. Tessenderlo | Sipef NV vs. EVS Broadcast Equipment | Sipef NV vs. Ackermans Van Haaren | Sipef 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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