Correlation Between Barco NV and Tubize Fin

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

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

Diversification Opportunities for Barco NV and Tubize Fin

-0.12

Correlation Coefficient

Barco NV  Tubize Fin

Good diversification

The 3 months correlation between Barco and Tubize is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Tubize Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tubize Fin and Barco 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 Barco NV are associated (or correlated) with Tubize Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tubize Fin has no effect on the direction of Barco NV i.e., Barco NV and Tubize Fin go up and down completely randomly.

Pair Corralation between Barco NV and Tubize Fin

Assuming the 90 days trading horizon Barco NV is expected to under-perform the Tubize Fin. But the stock apears to be less risky and, when comparing its historical volatility, Barco NV is 1.48 times less risky than Tubize Fin. The stock trades about -0.14 of its potential returns per unit of risk. The Tubize Fin is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,160  in Tubize Fin on September 15, 2024 and sell it today you would lose (400.00) from holding Tubize Fin or give up 2.82% of portfolio value over 90 days.

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

Barco NV  vs.  Tubize Fin

Barco NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barco NV 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.

Tubize Fin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tubize Fin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Tubize Fin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Barco NV and Tubize Fin

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

The idea behind Barco NV and Tubize Fin 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.