Correlation Between NV Bekaert and IBC Advanced

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

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

Diversification Opportunities for NV Bekaert and IBC Advanced

-0.36

Correlation Coefficient

NV Bekaert  IBC Advanced

Very good diversification

The 3 months correlation between BEKAY and IBC is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and IBC Advanced Alloys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBC Advanced Alloys and NV Bekaert 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 NV Bekaert SA are associated (or correlated) with IBC Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBC Advanced Alloys has no effect on the direction of NV Bekaert i.e., NV Bekaert and IBC Advanced go up and down completely randomly.

Pair Corralation between NV Bekaert and IBC Advanced

Assuming the 90 days horizon NV Bekaert SA is expected to under-perform the IBC Advanced. But the pink sheet apears to be less risky and, when comparing its historical volatility, NV Bekaert SA is 3.95 times less risky than IBC Advanced. The pink sheet trades about -0.17 of its potential returns per unit of risk. The IBC Advanced Alloys is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5.00  in IBC Advanced Alloys on September 19, 2024 and sell it today you would earn a total of  1.00  from holding IBC Advanced Alloys or generate 20.0% return on investment over 90 days.

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

NV Bekaert SA  vs.  IBC Advanced Alloys

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 inconsistent 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.

IBC Advanced Alloys

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in IBC Advanced Alloys are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, IBC Advanced reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NV Bekaert and IBC Advanced

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

The idea behind NV Bekaert SA and IBC Advanced Alloys 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.