Correlation Between Nyrstar NV and NV Bekaert

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

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

Diversification Opportunities for Nyrstar NV and NV Bekaert

-0.62

Correlation Coefficient

Nyrstar NV  NV Bekaert

Excellent diversification

The 3 months correlation between Nyrstar and BEKB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nyrstar NV and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA and Nyrstar 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 Nyrstar NV are associated (or correlated) with NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Nyrstar NV i.e., Nyrstar NV and NV Bekaert go up and down completely randomly.

Pair Corralation between Nyrstar NV and NV Bekaert

Assuming the 90 days trading horizon Nyrstar NV is expected to under-perform the NV Bekaert. In addition to that, Nyrstar NV is 2.36 times more volatile than NV Bekaert SA. It trades about -0.06 of its total potential returns per unit of risk. NV Bekaert SA is currently generating about 0.08 per unit of volatility. If you would invest  3,298  in NV Bekaert SA on December 27, 2024 and sell it today you would earn a total of  302.00  from holding NV Bekaert SA or generate 9.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nyrstar NV  vs.  NV Bekaert SA

Nyrstar NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nyrstar NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

NV Bekaert SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NV Bekaert SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NV Bekaert may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nyrstar NV and NV Bekaert

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

The idea behind Nyrstar NV and NV Bekaert SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.