Correlation Between Exmar NV and Immo Mcc

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

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

Diversification Opportunities for Exmar NV and Immo Mcc

-0.39

Correlation Coefficient

Exmar NV  Immo Mcc

Very good diversification

The 3 months correlation between Exmar and Immo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Exmar NV and Immo Mcc NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immo Mcc 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 Immo Mcc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immo Mcc NV has no effect on the direction of Exmar NV i.e., Exmar NV and Immo Mcc go up and down completely randomly.

Pair Corralation between Exmar NV and Immo Mcc

Assuming the 90 days trading horizon Exmar NV is expected to generate 14.92 times less return on investment than Immo Mcc. But when comparing it to its historical volatility, Exmar NV is 2.77 times less risky than Immo Mcc. It trades about 0.02 of its potential returns per unit of risk. Immo Mcc NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  42,400  in Immo Mcc NV on December 21, 2024 and sell it today you would earn a total of  2,400  from holding Immo Mcc NV or generate 5.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Exmar NV  vs.  Immo Mcc NV

Exmar NV

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 1 (%) 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.

Immo Mcc NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Immo Mcc NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Immo Mcc is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Exmar NV and Immo Mcc

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

The idea behind Exmar NV and Immo Mcc 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.