Correlation Between NV Bekaert and Imaflex

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

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

Diversification Opportunities for NV Bekaert and Imaflex

0.67

Correlation Coefficient

NV Bekaert  Imaflex

Poor diversification

The 3 months correlation between BEKB and Imaflex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding NV Bekaert SA and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex and NV Bekaert 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 NV Bekaert SA are associated (or correlated) with Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of NV Bekaert i.e., NV Bekaert and Imaflex go up and down completely randomly.

Pair Corralation between NV Bekaert and Imaflex

Assuming the 90 days trading horizon NV Bekaert is expected to generate 1.16 times less return on investment than Imaflex. But when comparing it to its historical volatility, NV Bekaert SA is 2.55 times less risky than Imaflex. It trades about 0.17 of its potential returns per unit of risk. Imaflex is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  114.00  in Imaflex on April 24, 2025 and sell it today you would earn a total of  16.00  from holding Imaflex or generate 14.04% return on investment over 90 days.

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

NV Bekaert SA  vs.  Imaflex

NV Bekaert SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NV Bekaert SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NV Bekaert reported solid returns over the last few months and may actually be approaching a breakup point.

Imaflex

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imaflex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Imaflex showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NV Bekaert and Imaflex

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

The idea behind NV Bekaert SA and Imaflex 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.