Correlation Between NV Bekaert and DIeteren Group
Can any of the company-specific risk be diversified away by investing in both NV Bekaert and DIeteren Group 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 NV Bekaert and DIeteren Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NV Bekaert SA and DIeteren Group SA, you can compare the effects of market volatilities on NV Bekaert and DIeteren Group 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 NV Bekaert with a short position of DIeteren Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Bekaert and DIeteren Group.
Diversification Opportunities for NV Bekaert and DIeteren Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BEKB and DIeteren is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and DIeteren Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIeteren Group SA and NV Bekaert 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 NV Bekaert SA are associated (or correlated) with DIeteren Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIeteren Group SA has no effect on the direction of NV Bekaert i.e., NV Bekaert and DIeteren Group go up and down completely randomly.
Pair Corralation between NV Bekaert and DIeteren Group
Assuming the 90 days trading horizon NV Bekaert SA is expected to under-perform the DIeteren Group. But the stock apears to be less risky and, when comparing its historical volatility, NV Bekaert SA is 2.32 times less risky than DIeteren Group. The stock trades about -0.04 of its potential returns per unit of risk. The DIeteren Group SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 12,971 in DIeteren Group SA on December 5, 2024 and sell it today you would earn a total of 2,599 from holding DIeteren Group SA or generate 20.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NV Bekaert SA vs. DIeteren Group SA
Performance |
Timeline |
NV Bekaert SA |
DIeteren Group SA |
NV Bekaert and DIeteren Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NV Bekaert and DIeteren Group
The main advantage of trading using opposite NV Bekaert and DIeteren Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NV Bekaert position performs unexpectedly, DIeteren Group 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 DIeteren Group will offset losses from the drop in DIeteren Group's long position.NV Bekaert vs. Solvay SA | NV Bekaert vs. Ackermans Van Haaren | NV Bekaert vs. Barco NV | NV Bekaert vs. Etablissementen Franz Colruyt |
DIeteren Group vs. Ackermans Van Haaren | DIeteren Group vs. Sofina Socit Anonyme | DIeteren Group vs. Groep Brussel Lambert | DIeteren Group vs. Barco 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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