Correlation Between VGP NV and Barco NV
Can any of the company-specific risk be diversified away by investing in both VGP NV and Barco 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 VGP NV and Barco NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGP NV and Barco NV, you can compare the effects of market volatilities on VGP NV and Barco 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 VGP NV with a short position of Barco NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGP NV and Barco NV.
Diversification Opportunities for VGP NV and Barco NV
Poor diversification
The 3 months correlation between VGP and Barco is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding VGP NV and Barco NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barco NV and VGP 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 VGP NV are associated (or correlated) with Barco NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barco NV has no effect on the direction of VGP NV i.e., VGP NV and Barco NV go up and down completely randomly.
Pair Corralation between VGP NV and Barco NV
Assuming the 90 days trading horizon VGP NV is expected to generate 0.93 times more return on investment than Barco NV. However, VGP NV is 1.08 times less risky than Barco NV. It trades about 0.02 of its potential returns per unit of risk. Barco NV is currently generating about -0.06 per unit of risk. If you would invest 7,427 in VGP NV on August 27, 2024 and sell it today you would earn a total of 503.00 from holding VGP NV or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGP NV vs. Barco NV
Performance |
| Timeline |
| VGP NV |
| Barco NV |
VGP NV and Barco NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGP NV and Barco NV
The main advantage of trading using opposite VGP NV and Barco NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGP NV position performs unexpectedly, Barco 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 Barco NV will offset losses from the drop in Barco NV's long position.| VGP NV vs. Warehouses de Pauw | VGP NV vs. Sofina Socit Anonyme | VGP NV vs. Aedifica | VGP NV vs. Xior Student Housing |
| Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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