Correlation Between BKV and BELIMO Holding

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

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

Diversification Opportunities for BKV and BELIMO Holding

-0.56

Correlation Coefficient

BKV  BELIMO Holding

Excellent diversification

The 3 months correlation between BKV and BELIMO is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BKV Corp. and BELIMO Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BELIMO Holding AG and BKV 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 BKV Corporation are associated (or correlated) with BELIMO Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BELIMO Holding AG has no effect on the direction of BKV i.e., BKV and BELIMO Holding go up and down completely randomly.

Pair Corralation between BKV and BELIMO Holding

Considering the 90-day investment horizon BKV Corporation is expected to generate 1.05 times more return on investment than BELIMO Holding. However, BKV is 1.05 times more volatile than BELIMO Holding AG. It trades about 0.23 of its potential returns per unit of risk. BELIMO Holding AG is currently generating about 0.07 per unit of risk. If you would invest  1,800  in BKV Corporation on October 3, 2024 and sell it today you would earn a total of  578.00  from holding BKV Corporation or generate 32.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	19.76%
Values	Daily Returns

BKV Corp.  vs.  BELIMO Holding AG

BKV Corporation

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BKV Corporation are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, BKV showed solid returns over the last few months and may actually be approaching a breakup point.

BELIMO Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BELIMO Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BELIMO Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BKV and BELIMO Holding

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

The idea behind BKV Corporation and BELIMO Holding AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.