Correlation Between Barco NV and Nyrstar NV

Can any of the company-specific risk be diversified away by investing in both Barco NV and Nyrstar 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 Barco NV and Nyrstar NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barco NV and Nyrstar NV, you can compare the effects of market volatilities on Barco NV and Nyrstar 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 Barco NV with a short position of Nyrstar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Nyrstar NV.

Diversification Opportunities for Barco NV and Nyrstar NV

-0.32

Correlation Coefficient

Barco NV  Nyrstar NV

Very good diversification

The 3 months correlation between Barco and Nyrstar is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Nyrstar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyrstar NV and Barco 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 Barco NV are associated (or correlated) with Nyrstar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyrstar NV has no effect on the direction of Barco NV i.e., Barco NV and Nyrstar NV go up and down completely randomly.

Pair Corralation between Barco NV and Nyrstar NV

Assuming the 90 days trading horizon Barco NV is expected to under-perform the Nyrstar NV. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 2.6 times less risky than Nyrstar NV. The stock trades about -0.06 of its potential returns per unit of risk. The Nyrstar NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Nyrstar NV on December 4, 2024 and sell it today you would lose (7.00) from holding Nyrstar NV or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Barco NV  vs.  Nyrstar NV

Barco NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Barco NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Barco NV may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nyrstar NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nyrstar NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nyrstar NV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Barco NV and Nyrstar NV

The main advantage of trading using opposite Barco NV and Nyrstar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Nyrstar 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 Nyrstar NV will offset losses from the drop in Nyrstar NV's long position.

The idea behind Barco NV and Nyrstar NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.