Correlation Between Applied Blockchain and NV Bekaert

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

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

Diversification Opportunities for Applied Blockchain and NV Bekaert

-0.46

Correlation Coefficient

Applied Blockchain  NV Bekaert

Very good diversification

The 3 months correlation between Applied and BEKAY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain 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 Applied Blockchain i.e., Applied Blockchain and NV Bekaert go up and down completely randomly.

Pair Corralation between Applied Blockchain and NV Bekaert

Given the investment horizon of 90 days Applied Blockchain is expected to generate 5.19 times more return on investment than NV Bekaert. However, Applied Blockchain is 5.19 times more volatile than NV Bekaert SA. It trades about 0.08 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.12 per unit of risk. If you would invest  441.00  in Applied Blockchain on September 20, 2024 and sell it today you would earn a total of  382.00  from holding Applied Blockchain or generate 86.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.77%
Values	Daily Returns

Applied Blockchain  vs.  NV Bekaert SA

Applied Blockchain

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

NV Bekaert SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NV Bekaert SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Applied Blockchain and NV Bekaert

The main advantage of trading using opposite Applied Blockchain and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Blockchain 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 Applied Blockchain 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..