Correlation Between Barco NV and Foreign Bond
Can any of the company-specific risk be diversified away by investing in both Barco NV and Foreign Bond 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 Barco NV and Foreign Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Foreign Bond Fund, you can compare the effects of market volatilities on Barco NV and Foreign Bond 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 Barco NV with a short position of Foreign Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Foreign Bond.
Diversification Opportunities for Barco NV and Foreign Bond
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barco and Foreign is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Foreign Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Bond and Barco 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 Barco NV are associated (or correlated) with Foreign Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Bond has no effect on the direction of Barco NV i.e., Barco NV and Foreign Bond go up and down completely randomly.
Pair Corralation between Barco NV and Foreign Bond
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Foreign Bond. In addition to that, Barco NV is 11.55 times more volatile than Foreign Bond Fund. It trades about -0.18 of its total potential returns per unit of risk. Foreign Bond Fund is currently generating about -0.31 per unit of volatility. If you would invest 753.00 in Foreign Bond Fund on January 26, 2024 and sell it today you would lose (16.00) from holding Foreign Bond Fund or give up 2.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Barco NV vs. Foreign Bond Fund
Performance |
Timeline |
Barco NV |
Foreign Bond |
Barco NV and Foreign Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barco NV and Foreign Bond
The main advantage of trading using opposite Barco NV and Foreign Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Foreign Bond 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 Foreign Bond will offset losses from the drop in Foreign Bond's long position.Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
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Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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