Correlation Between BIO UV and Agripower France
Can any of the company-specific risk be diversified away by investing in both BIO UV and Agripower France 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 BIO UV and Agripower France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIO UV Group and Agripower France Sa, you can compare the effects of market volatilities on BIO UV and Agripower France 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 BIO UV with a short position of Agripower France. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO UV and Agripower France.
Diversification Opportunities for BIO UV and Agripower France
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIO and Agripower is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BIO UV Group and Agripower France Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripower France and BIO UV 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 BIO UV Group are associated (or correlated) with Agripower France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripower France has no effect on the direction of BIO UV i.e., BIO UV and Agripower France go up and down completely randomly.
Pair Corralation between BIO UV and Agripower France
Assuming the 90 days trading horizon BIO UV Group is expected to generate 0.54 times more return on investment than Agripower France. However, BIO UV Group is 1.86 times less risky than Agripower France. It trades about -0.08 of its potential returns per unit of risk. Agripower France Sa is currently generating about -0.08 per unit of risk. If you would invest 478.00 in BIO UV Group on August 28, 2024 and sell it today you would lose (318.00) from holding BIO UV Group or give up 66.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO UV Group vs. Agripower France Sa
Performance |
| Timeline |
| BIO UV Group |
| Agripower France |
BIO UV and Agripower France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO UV and Agripower France
The main advantage of trading using opposite BIO UV and Agripower France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO UV position performs unexpectedly, Agripower France 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 Agripower France will offset losses from the drop in Agripower France's long position.The idea behind BIO UV Group and Agripower France 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.| Agripower France vs. Glob Bioenergi | Agripower France vs. BIO UV Group | Agripower France vs. Voltalia SA | Agripower France vs. Hoffmann Green Cement |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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