Correlation Between Groep Brussel and Nyrstar NV

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

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

Diversification Opportunities for Groep Brussel and Nyrstar NV

-0.55

Correlation Coefficient

Groep Brussel  Nyrstar NV

Excellent diversification

The 3 months correlation between Groep and Nyrstar is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Nyrstar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nyrstar NV and Groep Brussel 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 Groep Brussel Lambert 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 Groep Brussel i.e., Groep Brussel and Nyrstar NV go up and down completely randomly.

Pair Corralation between Groep Brussel and Nyrstar NV

Assuming the 90 days trading horizon Groep Brussel Lambert is expected to under-perform the Nyrstar NV. But the stock apears to be less risky and, when comparing its historical volatility, Groep Brussel Lambert is 8.61 times less risky than Nyrstar NV. The stock trades about -0.03 of its potential returns per unit of risk. The Nyrstar NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5.80  in Nyrstar NV on October 1, 2024 and sell it today you would earn a total of  1.60  from holding Nyrstar NV or generate 27.59% return on investment over 90 days.

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

Groep Brussel Lambert  vs.  Nyrstar NV

Groep Brussel Lambert

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groep Brussel Lambert 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.

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 Groep Brussel and Nyrstar NV

The main advantage of trading using opposite Groep Brussel and Nyrstar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel 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 Groep Brussel Lambert 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.