Correlation Between Sofina Socit and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Sofina Socit 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 Sofina Socit and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofina Socit Anonyme and NV Bekaert SA, you can compare the effects of market volatilities on Sofina Socit 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 Sofina Socit with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and NV Bekaert.
Diversification Opportunities for Sofina Socit and NV Bekaert
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sofina and BEKB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme 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 Sofina Socit 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 Sofina Socit Anonyme 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 Sofina Socit i.e., Sofina Socit and NV Bekaert go up and down completely randomly.
Pair Corralation between Sofina Socit and NV Bekaert
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 1.12 times more return on investment than NV Bekaert. However, Sofina Socit is 1.12 times more volatile than NV Bekaert SA. It trades about 0.04 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.08 per unit of risk. If you would invest 22,080 in Sofina Socit Anonyme on November 28, 2024 and sell it today you would earn a total of 2,060 from holding Sofina Socit Anonyme or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. NV Bekaert SA
Performance |
| Timeline |
| Sofina Socit Anonyme |
| NV Bekaert SA |
Sofina Socit and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and NV Bekaert
The main advantage of trading using opposite Sofina Socit and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit 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.| Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. EVS Broadcast Equipment | Sofina Socit vs. Immolease Trust NV | Sofina Socit vs. Vastned Retail Belgium |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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