Correlation Between RENEWI and Signify NV

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

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

Diversification Opportunities for RENEWI and Signify NV

-0.67

Correlation Coefficient

RENEWI  Signify NV

Excellent diversification

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

Pair Corralation between RENEWI and Signify NV

Assuming the 90 days trading horizon RENEWI is expected to under-perform the Signify NV. In addition to that, RENEWI is 8.1 times more volatile than Signify NV. It trades about -0.13 of its total potential returns per unit of risk. Signify NV is currently generating about 0.3 per unit of volatility. If you would invest  1,677  in Signify NV on April 14, 2025 and sell it today you would earn a total of  575.00  from holding Signify NV or generate 34.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

RENEWI  vs.  Signify NV

RENEWI

Risk-Adjusted Performance

Very Weak

Over the last 90 days RENEWI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Signify NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Signify NV are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Signify NV sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RENEWI and Signify NV

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

The idea behind RENEWI and Signify 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.