Correlation Between Exmar NV and Belysse Group

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

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

Diversification Opportunities for Exmar NV and Belysse Group

0.13

Correlation Coefficient

Exmar NV  Belysse Group

Average diversification

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

Pair Corralation between Exmar NV and Belysse Group

Assuming the 90 days trading horizon Exmar NV is expected to generate 33.37 times less return on investment than Belysse Group. But when comparing it to its historical volatility, Exmar NV is 15.6 times less risky than Belysse Group. It trades about 0.06 of its potential returns per unit of risk. Belysse Group NV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  64.00  in Belysse Group NV on December 30, 2024 and sell it today you would earn a total of  24.00  from holding Belysse Group NV or generate 37.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Exmar NV  vs.  Belysse Group NV

Exmar NV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable primary indicators, Exmar NV is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Belysse Group NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Belysse Group NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Belysse Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exmar NV and Belysse Group

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

The idea behind Exmar NV and Belysse Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.