Correlation Between Bpost NV and AGFA Gevaert

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

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

Diversification Opportunities for Bpost NV and AGFA Gevaert

0.91

Correlation Coefficient

Bpost NV  AGFA Gevaert

Almost no diversification

The 3 months correlation between Bpost and AGFA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and AGFA Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFA Gevaert NV and Bpost 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 Bpost NV are associated (or correlated) with AGFA Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFA Gevaert NV has no effect on the direction of Bpost NV i.e., Bpost NV and AGFA Gevaert go up and down completely randomly.

Pair Corralation between Bpost NV and AGFA Gevaert

Assuming the 90 days trading horizon Bpost NV is expected to generate 0.5 times more return on investment than AGFA Gevaert. However, Bpost NV is 2.01 times less risky than AGFA Gevaert. It trades about -0.16 of its potential returns per unit of risk. AGFA Gevaert NV is currently generating about -0.11 per unit of risk. If you would invest  235.00  in Bpost NV on October 20, 2024 and sell it today you would lose (42.00) from holding Bpost NV or give up 17.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Bpost NV  vs.  AGFA Gevaert NV

Bpost NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bpost NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

AGFA Gevaert NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGFA Gevaert NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Bpost NV and AGFA Gevaert

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

The idea behind Bpost NV and AGFA Gevaert 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..