Correlation Between NV Bekaert and Nyrstar NV

Can any of the company-specific risk be diversified away by investing in both NV Bekaert and Nyrstar NV 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 Nyrstar NV 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 Nyrstar NV, you can compare the effects of market volatilities on NV Bekaert and Nyrstar NV 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 Nyrstar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of NV Bekaert and Nyrstar NV.

Diversification Opportunities for NV Bekaert and Nyrstar NV

-0.63

Correlation Coefficient

NV Bekaert  Nyrstar NV

Excellent diversification

The 3 months correlation between BEKB and Nyrstar is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and Nyrstar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyrstar NV 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 Nyrstar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nyrstar NV has no effect on the direction of NV Bekaert i.e., NV Bekaert and Nyrstar NV go up and down completely randomly.

Pair Corralation between NV Bekaert and Nyrstar NV

Assuming the 90 days trading horizon NV Bekaert SA is not expected to generate positive returns. However, NV Bekaert SA is 6.28 times less risky than Nyrstar NV. It waists most of its returns potential to compensate for thr risk taken. Nyrstar NV is generating about 0.14 per unit of risk. If you would invest  3.90  in Nyrstar NV on September 13, 2024 and sell it today you would earn a total of  3.22  from holding Nyrstar NV or generate 82.56% return on investment over 90 days.

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

NV Bekaert SA  vs.  Nyrstar NV

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. Even with relatively invariable basic indicators, NV Bekaert is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Nyrstar NV

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nyrstar NV are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Nyrstar NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NV Bekaert and Nyrstar NV

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

The idea behind NV Bekaert SA and Nyrstar NV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.