Correlation Between BIO UV and Voltalia
Can any of the company-specific risk be diversified away by investing in both BIO UV and Voltalia 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 Voltalia 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 Voltalia SA, you can compare the effects of market volatilities on BIO UV and Voltalia 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 Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIO UV and Voltalia.
Diversification Opportunities for BIO UV and Voltalia
Very weak diversification
The 3 months correlation between BIO and Voltalia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BIO UV Group and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA 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 Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of BIO UV i.e., BIO UV and Voltalia go up and down completely randomly.
Pair Corralation between BIO UV and Voltalia
Assuming the 90 days trading horizon BIO UV Group is expected to under-perform the Voltalia. But the stock apears to be less risky and, when comparing its historical volatility, BIO UV Group is 1.29 times less risky than Voltalia. The stock trades about -0.07 of its potential returns per unit of risk. The Voltalia SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,750 in Voltalia SA on September 3, 2024 and sell it today you would lose (982.00) from holding Voltalia SA or give up 56.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIO UV Group vs. Voltalia SA
Performance |
| Timeline |
| BIO UV Group |
| Voltalia SA |
BIO UV and Voltalia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIO UV and Voltalia
The main advantage of trading using opposite BIO UV and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIO UV position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.| BIO UV vs. Veolia Environnement VE | BIO UV vs. Derichebourg | BIO UV vs. Groupe Pizzorno Environnement | BIO UV vs. Aurea 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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