Correlation Between Tessenderlo and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Tessenderlo 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 Tessenderlo and NV Bekaert into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tessenderlo and NV Bekaert SA, you can compare the effects of market volatilities on Tessenderlo 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 Tessenderlo with a short position of NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tessenderlo and NV Bekaert.
Diversification Opportunities for Tessenderlo and NV Bekaert
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tessenderlo and BEKB is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tessenderlo 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 Tessenderlo 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 Tessenderlo 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 Tessenderlo i.e., Tessenderlo and NV Bekaert go up and down completely randomly.
Pair Corralation between Tessenderlo and NV Bekaert
Assuming the 90 days trading horizon Tessenderlo is expected to generate 0.9 times more return on investment than NV Bekaert. However, Tessenderlo is 1.11 times less risky than NV Bekaert. It trades about -0.07 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.14 per unit of risk. If you would invest 2,492 in Tessenderlo on August 29, 2024 and sell it today you would lose (282.00) from holding Tessenderlo or give up 11.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tessenderlo vs. NV Bekaert SA
Performance |
| Timeline |
| Tessenderlo |
| NV Bekaert SA |
Tessenderlo and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tessenderlo and NV Bekaert
The main advantage of trading using opposite Tessenderlo and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tessenderlo 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.| Tessenderlo vs. Ackermans Van Haaren | Tessenderlo vs. NV Bekaert SA | Tessenderlo vs. Groep Brussel Lambert | Tessenderlo vs. Tubize Fin |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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