Correlation Between Cenergy Holdings and NV Bekaert

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

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

Diversification Opportunities for Cenergy Holdings and NV Bekaert

0.89

Correlation Coefficient

Cenergy Holdings  NV Bekaert

Very poor diversification

The 3 months correlation between Cenergy and BEKB is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cenergy Holdings SA 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 Cenergy Holdings 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 Cenergy Holdings SA 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 Cenergy Holdings i.e., Cenergy Holdings and NV Bekaert go up and down completely randomly.

Pair Corralation between Cenergy Holdings and NV Bekaert

Assuming the 90 days trading horizon Cenergy Holdings SA is expected to generate 2.14 times more return on investment than NV Bekaert. However, Cenergy Holdings is 2.14 times more volatile than NV Bekaert SA. It trades about -0.02 of its potential returns per unit of risk. NV Bekaert SA is currently generating about -0.11 per unit of risk. If you would invest  920.00  in Cenergy Holdings SA on August 30, 2024 and sell it today you would lose (70.00) from holding Cenergy Holdings SA or give up 7.61% of portfolio value over 90 days.

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

Cenergy Holdings SA  vs.  NV Bekaert SA

Cenergy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cenergy Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Cenergy Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Cenergy Holdings and NV Bekaert

The main advantage of trading using opposite Cenergy Holdings and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenergy Holdings 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 Cenergy Holdings SA 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.