Correlation Between Emova Group and BEBO Health
Can any of the company-specific risk be diversified away by investing in both Emova Group and BEBO Health 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 Emova Group and BEBO Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emova Group SA and BEBO Health SA, you can compare the effects of market volatilities on Emova Group and BEBO Health 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 Emova Group with a short position of BEBO Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emova Group and BEBO Health.
Diversification Opportunities for Emova Group and BEBO Health
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emova and BEBO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Emova Group SA and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA and Emova Group 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 Emova Group SA are associated (or correlated) with BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of Emova Group i.e., Emova Group and BEBO Health go up and down completely randomly.
Pair Corralation between Emova Group and BEBO Health
Assuming the 90 days trading horizon Emova Group SA is expected to generate 1.18 times more return on investment than BEBO Health. However, Emova Group is 1.18 times more volatile than BEBO Health SA. It trades about -0.01 of its potential returns per unit of risk. BEBO Health SA is currently generating about -0.1 per unit of risk. If you would invest 96.00 in Emova Group SA on September 1, 2024 and sell it today you would lose (9.00) from holding Emova Group SA or give up 9.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Emova Group SA vs. BEBO Health SA
Performance |
| Timeline |
| Emova Group SA |
| BEBO Health SA |
Emova Group and BEBO Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emova Group and BEBO Health
The main advantage of trading using opposite Emova Group and BEBO Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emova Group position performs unexpectedly, BEBO Health 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 BEBO Health will offset losses from the drop in BEBO Health's long position.The idea behind Emova Group SA and BEBO Health 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.| BEBO Health vs. Jacquet Metal Service | BEBO Health vs. Affluent Medical SAS | BEBO Health vs. Fiducial Office Solutions | BEBO Health vs. Guandao Puer 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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