Correlation Between Van De and Exmar NV

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

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

Diversification Opportunities for Van De and Exmar NV

0.0

Correlation Coefficient

Van De  Exmar NV

Pay attention - limited upside

The 3 months correlation between Van and Exmar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Van de Velde and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV and Van De 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 Van de Velde are associated (or correlated) with Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Van De i.e., Van De and Exmar NV go up and down completely randomly.

Pair Corralation between Van De and Exmar NV

Assuming the 90 days trading horizon Van de Velde is expected to under-perform the Exmar NV. But the stock apears to be less risky and, when comparing its historical volatility, Van de Velde is 2.46 times less risky than Exmar NV. The stock trades about -0.14 of its potential returns per unit of risk. The Exmar NV is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  870.00  in Exmar NV on August 31, 2024 and sell it today you would lose (34.00) from holding Exmar NV or give up 3.91% of portfolio value over 90 days.

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

Van de Velde  vs.  Exmar NV

Van de Velde

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Van de Velde 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.

Exmar NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exmar NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Exmar NV is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Van De and Exmar NV

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

The idea behind Van de Velde and Exmar 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.