Correlation Between VPN Technologies and NV Bekaert

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

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

Diversification Opportunities for VPN Technologies and NV Bekaert

-0.22

Correlation Coefficient

VPN Technologies  NV Bekaert

Very good diversification

The 3 months correlation between VPN and BEKAY is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding VPN Technologies 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 VPN 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 VPN Technologies 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 VPN Technologies i.e., VPN Technologies and NV Bekaert go up and down completely randomly.

Pair Corralation between VPN Technologies and NV Bekaert

If you would invest  506.00  in NV Bekaert SA on February 24, 2024 and sell it today you would lose (3.00) from holding NV Bekaert SA or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

VPN Technologies  vs.  NV Bekaert SA

VPN Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VPN Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, VPN Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

NV Bekaert SA

Risk-Adjusted Performance

5 of 100

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. In spite of fairly weak basic indicators, NV Bekaert may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with VPN Technologies and NV Bekaert

The main advantage of trading using opposite VPN Technologies and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VPN Technologies 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 VPN Technologies 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..