Correlation Between Greenyard and Ontex Group

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

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

Diversification Opportunities for Greenyard and Ontex Group

-0.4

Correlation Coefficient

Greenyard  Ontex Group

Very good diversification

The 3 months correlation between Greenyard and Ontex is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Greenyard NV and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV and Greenyard 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 Greenyard NV are associated (or correlated) with Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of Greenyard i.e., Greenyard and Ontex Group go up and down completely randomly.

Pair Corralation between Greenyard and Ontex Group

Assuming the 90 days trading horizon Greenyard NV is expected to under-perform the Ontex Group. But the stock apears to be less risky and, when comparing its historical volatility, Greenyard NV is 1.84 times less risky than Ontex Group. The stock trades about -0.49 of its potential returns per unit of risk. The Ontex Group NV is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  823.00  in Ontex Group NV on October 26, 2024 and sell it today you would lose (13.00) from holding Ontex Group NV or give up 1.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Greenyard NV  vs.  Ontex Group NV

Greenyard NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenyard 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.

Ontex Group NV

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ontex Group NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Ontex Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Greenyard and Ontex Group

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

The idea behind Greenyard NV and Ontex 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.