Correlation Between Tubize Fin and NV Bekaert

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

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

Diversification Opportunities for Tubize Fin and NV Bekaert

-0.6

Correlation Coefficient

Tubize Fin  NV Bekaert

Excellent diversification

The 3 months correlation between Tubize and BEKB is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tubize Fin 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 Tubize Fin 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 Tubize Fin 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 Tubize Fin i.e., Tubize Fin and NV Bekaert go up and down completely randomly.

Pair Corralation between Tubize Fin and NV Bekaert

Assuming the 90 days trading horizon Tubize Fin is expected to under-perform the NV Bekaert. In addition to that, Tubize Fin is 1.06 times more volatile than NV Bekaert SA. It trades about -0.04 of its total potential returns per unit of risk. NV Bekaert SA is currently generating about 0.05 per unit of volatility. If you would invest  3,260  in NV Bekaert SA on December 30, 2024 and sell it today you would earn a total of  188.00  from holding NV Bekaert SA or generate 5.77% return on investment over 90 days.

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

Tubize Fin  vs.  NV Bekaert SA

Tubize Fin

Risk-Adjusted Performance

Very Weak

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

NV Bekaert SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NV Bekaert SA are ranked lower than 4 (%) 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 Tubize Fin and NV Bekaert

The main advantage of trading using opposite Tubize Fin and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tubize Fin 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 Tubize Fin 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.