Correlation Between NV Bekaert and Jensen

Can any of the company-specific risk be diversified away by investing in both NV Bekaert and Jensen 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 Jensen 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 Jensen Group, you can compare the effects of market volatilities on NV Bekaert and Jensen 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 Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Bekaert and Jensen.

Diversification Opportunities for NV Bekaert and Jensen

-0.13

Correlation Coefficient

NV Bekaert  Jensen

Good diversification

The 3 months correlation between BEKB and Jensen is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and Jensen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Group 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 Jensen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Group has no effect on the direction of NV Bekaert i.e., NV Bekaert and Jensen go up and down completely randomly.

Pair Corralation between NV Bekaert and Jensen

Assuming the 90 days trading horizon NV Bekaert is expected to generate 1.44 times less return on investment than Jensen. In addition to that, NV Bekaert is 1.76 times more volatile than Jensen Group. It trades about 0.06 of its total potential returns per unit of risk. Jensen Group is currently generating about 0.16 per unit of volatility. If you would invest  4,320  in Jensen Group on October 24, 2024 and sell it today you would earn a total of  140.00  from holding Jensen Group or generate 3.24% return on investment over 90 days.

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

NV Bekaert SA  vs.  Jensen Group

NV Bekaert SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Jensen Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jensen Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Jensen may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with NV Bekaert and Jensen

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

The idea behind NV Bekaert SA and Jensen Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.