Correlation Between Melexis NV and Scheerders Van

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

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

Diversification Opportunities for Melexis NV and Scheerders Van

0.32

Correlation Coefficient

Melexis NV  Scheerders Van

Weak diversification

The 3 months correlation between Melexis and Scheerders is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Melexis NV and Scheerders van Kerchoves in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scheerders van Kerchoves and Melexis 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 Melexis NV are associated (or correlated) with Scheerders Van. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scheerders van Kerchoves has no effect on the direction of Melexis NV i.e., Melexis NV and Scheerders Van go up and down completely randomly.

Pair Corralation between Melexis NV and Scheerders Van

Assuming the 90 days trading horizon Melexis NV is expected to under-perform the Scheerders Van. In addition to that, Melexis NV is 3.37 times more volatile than Scheerders van Kerchoves. It trades about -0.02 of its total potential returns per unit of risk. Scheerders van Kerchoves is currently generating about 0.04 per unit of volatility. If you would invest  2,723  in Scheerders van Kerchoves on December 30, 2024 and sell it today you would earn a total of  52.00  from holding Scheerders van Kerchoves or generate 1.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.85%
Values	Daily Returns

Melexis NV  vs.  Scheerders van Kerchoves

Melexis NV

Risk-Adjusted Performance

Very Weak

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

Scheerders van Kerchoves

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Scheerders van Kerchoves are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Scheerders Van 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 Melexis NV and Scheerders Van

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

The idea behind Melexis NV and Scheerders van Kerchoves 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..