Correlation Between Exor NV and Corbion NV

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

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

Diversification Opportunities for Exor NV and Corbion NV

0.77

Correlation Coefficient

Exor NV  Corbion NV

Poor diversification

The 3 months correlation between Exor and Corbion is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Corbion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corbion NV and Exor 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 Exor NV are associated (or correlated) with Corbion NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corbion NV has no effect on the direction of Exor NV i.e., Exor NV and Corbion NV go up and down completely randomly.

Pair Corralation between Exor NV and Corbion NV

Assuming the 90 days trading horizon Exor NV is expected to under-perform the Corbion NV. But the stock apears to be less risky and, when comparing its historical volatility, Exor NV is 1.33 times less risky than Corbion NV. The stock trades about -0.12 of its potential returns per unit of risk. The Corbion NV is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  2,382  in Corbion NV on September 19, 2024 and sell it today you would lose (210.00) from holding Corbion NV or give up 8.82% of portfolio value over 90 days.

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

Exor NV  vs.  Corbion NV

Exor NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exor NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Corbion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corbion NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Exor NV and Corbion NV

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

The idea behind Exor NV and Corbion 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.