Correlation Between ADF and NV Bekaert

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

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

Diversification Opportunities for ADF and NV Bekaert

0.28

Correlation Coefficient

ADF  NV Bekaert

Modest diversification

The 3 months correlation between ADF and BEKB is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ADF Group and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA and ADF 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 ADF Group are associated (or correlated) with NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of ADF i.e., ADF and NV Bekaert go up and down completely randomly.

Pair Corralation between ADF and NV Bekaert

Assuming the 90 days trading horizon ADF Group is expected to generate 4.29 times more return on investment than NV Bekaert. However, ADF is 4.29 times more volatile than NV Bekaert SA. It trades about 0.07 of its potential returns per unit of risk. NV Bekaert SA is currently generating about 0.14 per unit of risk. If you would invest  755.00  in ADF Group on May 15, 2025 and sell it today you would earn a total of  126.00  from holding ADF Group or generate 16.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

ADF Group  vs.  NV Bekaert SA

ADF Group

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in ADF Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ADF displayed solid returns over the last few months and may actually be approaching a breakup point.

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 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NV Bekaert may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ADF and NV Bekaert

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

The idea behind ADF Group and NV Bekaert SA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.