Correlation Between Bluelinea and Synergie
Can any of the company-specific risk be diversified away by investing in both Bluelinea and Synergie 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 Bluelinea and Synergie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluelinea SA and Synergie SE, you can compare the effects of market volatilities on Bluelinea and Synergie 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 Bluelinea with a short position of Synergie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluelinea and Synergie.
Diversification Opportunities for Bluelinea and Synergie
Very good diversification
The 3 months correlation between Bluelinea and Synergie is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bluelinea SA and Synergie SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergie SE and Bluelinea 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 Bluelinea SA are associated (or correlated) with Synergie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergie SE has no effect on the direction of Bluelinea i.e., Bluelinea and Synergie go up and down completely randomly.
Pair Corralation between Bluelinea and Synergie
Assuming the 90 days trading horizon Bluelinea SA is expected to generate 0.91 times more return on investment than Synergie. However, Bluelinea SA is 1.1 times less risky than Synergie. It trades about -0.21 of its potential returns per unit of risk. Synergie SE is currently generating about -0.25 per unit of risk. If you would invest 95.00 in Bluelinea SA on September 1, 2024 and sell it today you would lose (5.00) from holding Bluelinea SA or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluelinea SA vs. Synergie SE
Performance |
| Timeline |
| Bluelinea SA |
| Synergie SE |
Bluelinea and Synergie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluelinea and Synergie
The main advantage of trading using opposite Bluelinea and Synergie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluelinea position performs unexpectedly, Synergie 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 Synergie will offset losses from the drop in Synergie's long position.The idea behind Bluelinea SA and Synergie SE 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.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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