Correlation Between Alten SA and Bnteau SA
Can any of the company-specific risk be diversified away by investing in both Alten SA 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 Alten SA and Bnteau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alten SA and Bnteau SA, you can compare the effects of market volatilities on Alten SA 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 Alten SA with a short position of Bnteau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alten SA and Bnteau SA.
Diversification Opportunities for Alten SA and Bnteau SA
Significant diversification
The 3 months correlation between Alten and Bnteau is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alten SA and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Alten SA 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 Alten SA 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 Alten SA i.e., Alten SA and Bnteau SA go up and down completely randomly.
Pair Corralation between Alten SA and Bnteau SA
Assuming the 90 days trading horizon Alten SA is expected to generate 0.71 times more return on investment than Bnteau SA. However, Alten SA is 1.4 times less risky than Bnteau SA. It trades about -0.07 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.45 per unit of risk. If you would invest 7,770 in Alten SA on September 1, 2024 and sell it today you would lose (225.00) from holding Alten SA or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Alten SA vs. Bnteau SA
Performance |
| Timeline |
| Alten SA |
| Bnteau SA |
Alten SA and Bnteau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alten SA and Bnteau SA
The main advantage of trading using opposite Alten SA and Bnteau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alten SA 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.| Alten SA vs. Sopra Steria Group | Alten SA vs. Teleperformance SE | Alten SA vs. Capgemini SE | Alten SA vs. Aubay Socit Anonyme |
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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 Stocks Directory module to find actively traded stocks across global markets.
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