Correlation Between Fountaine Pajo and Bnteau SA
Can any of the company-specific risk be diversified away by investing in both Fountaine Pajo and Bnteau SA 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 Fountaine Pajo and Bnteau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fountaine Pajo and Bnteau SA, you can compare the effects of market volatilities on Fountaine Pajo and Bnteau SA 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 Fountaine Pajo with a short position of Bnteau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fountaine Pajo and Bnteau SA.
Diversification Opportunities for Fountaine Pajo and Bnteau SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fountaine and Bnteau is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fountaine Pajo and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Fountaine Pajo 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 Fountaine Pajo are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Fountaine Pajo i.e., Fountaine Pajo and Bnteau SA go up and down completely randomly.
Pair Corralation between Fountaine Pajo and Bnteau SA
Assuming the 90 days trading horizon Fountaine Pajo is expected to generate 0.81 times more return on investment than Bnteau SA. However, Fountaine Pajo is 1.23 times less risky than Bnteau SA. It trades about 0.05 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.06 per unit of risk. If you would invest 9,700 in Fountaine Pajo on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Fountaine Pajo or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fountaine Pajo vs. Bnteau SA
Performance |
| Timeline |
| Fountaine Pajo |
| Bnteau SA |
Fountaine Pajo and Bnteau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fountaine Pajo and Bnteau SA
The main advantage of trading using opposite Fountaine Pajo and Bnteau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fountaine Pajo position performs unexpectedly, Bnteau SA 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 Bnteau SA will offset losses from the drop in Bnteau SA's long position.| Fountaine Pajo vs. SA Catana Group | Fountaine Pajo vs. Trigano SA | Fountaine Pajo vs. Bnteau SA | Fountaine Pajo vs. Piscines Desjoyaux SA |
| Bnteau SA vs. Trigano SA | Bnteau SA vs. SA Catana Group | Bnteau SA vs. Fountaine Pajo | Bnteau SA vs. Piscines Desjoyaux SA |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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