Correlation Between Fagron NV and Banque Nationale

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

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

Diversification Opportunities for Fagron NV and Banque Nationale

-0.64

Correlation Coefficient

Fagron NV  Banque Nationale

Excellent diversification

The 3 months correlation between Fagron and Banque is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fagron NV and Banque nationale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque nationale and Fagron 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 Fagron NV are associated (or correlated) with Banque Nationale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque nationale has no effect on the direction of Fagron NV i.e., Fagron NV and Banque Nationale go up and down completely randomly.

Pair Corralation between Fagron NV and Banque Nationale

Assuming the 90 days trading horizon Fagron NV is expected to generate 0.89 times more return on investment than Banque Nationale. However, Fagron NV is 1.12 times less risky than Banque Nationale. It trades about 0.27 of its potential returns per unit of risk. Banque nationale de is currently generating about -0.03 per unit of risk. If you would invest  1,710  in Fagron NV on January 31, 2024 and sell it today you would earn a total of  110.00  from holding Fagron NV or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Fagron NV  vs.  Banque nationale de

Fagron NV

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fagron NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fagron NV may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Banque nationale

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Banque nationale de has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Fagron NV and Banque Nationale

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

The idea behind Fagron NV and Banque nationale de 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.