Correlation Between Biosynex and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Biosynex and Les Hotels 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 Biosynex and Les Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biosynex and Les Hotels Bav, you can compare the effects of market volatilities on Biosynex and Les Hotels 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 Biosynex with a short position of Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biosynex and Les Hotels.
Diversification Opportunities for Biosynex and Les Hotels
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Biosynex and Les is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Biosynex and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav and Biosynex 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 Biosynex are associated (or correlated) with Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Biosynex i.e., Biosynex and Les Hotels go up and down completely randomly.
Pair Corralation between Biosynex and Les Hotels
Assuming the 90 days trading horizon Biosynex is expected to under-perform the Les Hotels. In addition to that, Biosynex is 2.17 times more volatile than Les Hotels Bav. It trades about -0.05 of its total potential returns per unit of risk. Les Hotels Bav is currently generating about 0.04 per unit of volatility. If you would invest 5,750 in Les Hotels Bav on August 26, 2024 and sell it today you would earn a total of 1,350 from holding Les Hotels Bav or generate 23.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.26% |
| Values | Daily Returns |
Biosynex vs. Les Hotels Bav
Performance |
| Timeline |
| Biosynex |
| Les Hotels Bav |
Biosynex and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biosynex and Les Hotels
The main advantage of trading using opposite Biosynex and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biosynex position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Biosynex vs. Biomerieux SA | Biosynex vs. Eurofins Scientific SE | Biosynex vs. Sartorius Stedim Biotech | Biosynex vs. SEB SA |
| Les Hotels vs. SA Catana Group | Les Hotels vs. Reworld Media | Les Hotels vs. Biosynex | Les Hotels vs. Moulinvest |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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