Correlation Between Carlo Gavazzi and Nebag Ag

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

By analyzing existing cross correlation between Carlo Gavazzi Holding and Nebag ag, you can compare the effects of market volatilities on Carlo Gavazzi and Nebag Ag 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 Carlo Gavazzi with a short position of Nebag Ag. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlo Gavazzi and Nebag Ag.

Diversification Opportunities for Carlo Gavazzi and Nebag Ag

0.17

Correlation Coefficient

Carlo Gavazzi  Nebag Ag

Average diversification

The 3 months correlation between Carlo and Nebag is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Carlo Gavazzi Holding and Nebag ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebag ag and Carlo Gavazzi 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 Carlo Gavazzi Holding are associated (or correlated) with Nebag Ag. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebag ag has no effect on the direction of Carlo Gavazzi i.e., Carlo Gavazzi and Nebag Ag go up and down completely randomly.

Pair Corralation between Carlo Gavazzi and Nebag Ag

Assuming the 90 days trading horizon Carlo Gavazzi Holding is expected to generate 1.84 times more return on investment than Nebag Ag. However, Carlo Gavazzi is 1.84 times more volatile than Nebag ag. It trades about 0.0 of its potential returns per unit of risk. Nebag ag is currently generating about -0.02 per unit of risk. If you would invest  31,800  in Carlo Gavazzi Holding on March 4, 2024 and sell it today you would lose (300.00) from holding Carlo Gavazzi Holding or give up 0.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Carlo Gavazzi Holding  vs.  Nebag ag

Carlo Gavazzi Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlo Gavazzi Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Carlo Gavazzi is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nebag ag

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nebag ag has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nebag Ag is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Carlo Gavazzi and Nebag Ag

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

The idea behind Carlo Gavazzi Holding and Nebag ag 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.