Correlation Between Keyware Technologies and Exmar NV

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

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

Diversification Opportunities for Keyware Technologies and Exmar NV

0.28

Correlation Coefficient

Keyware Technologies  Exmar NV

Modest diversification

The 3 months correlation between Keyware and Exmar is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV and Keyware Technologies 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 Keyware Technologies NV are associated (or correlated) with Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Keyware Technologies i.e., Keyware Technologies and Exmar NV go up and down completely randomly.

Pair Corralation between Keyware Technologies and Exmar NV

Assuming the 90 days trading horizon Keyware Technologies NV is expected to under-perform the Exmar NV. In addition to that, Keyware Technologies is 5.44 times more volatile than Exmar NV. It trades about 0.0 of its total potential returns per unit of risk. Exmar NV is currently generating about 0.11 per unit of volatility. If you would invest  1,120  in Exmar NV on December 4, 2024 and sell it today you would earn a total of  24.00  from holding Exmar NV or generate 2.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Keyware Technologies NV  vs.  Exmar NV

Keyware Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyware Technologies NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Keyware Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Exmar NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exmar NV are ranked lower than 8 (%) 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.

Pair Trading with Keyware Technologies and Exmar NV

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

The idea behind Keyware Technologies NV and Exmar 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.