Correlation Between Bains Mer and Claranova
Can any of the company-specific risk be diversified away by investing in both Bains Mer and Claranova 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 Bains Mer and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bains Mer Monaco and Claranova SE, you can compare the effects of market volatilities on Bains Mer and Claranova 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 Bains Mer with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bains Mer and Claranova.
Diversification Opportunities for Bains Mer and Claranova
Poor diversification
The 3 months correlation between Bains and Claranova is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bains Mer Monaco and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Bains Mer 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 Bains Mer Monaco are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Bains Mer i.e., Bains Mer and Claranova go up and down completely randomly.
Pair Corralation between Bains Mer and Claranova
Assuming the 90 days trading horizon Bains Mer Monaco is expected to under-perform the Claranova. But the stock apears to be less risky and, when comparing its historical volatility, Bains Mer Monaco is 1.64 times less risky than Claranova. The stock trades about -0.03 of its potential returns per unit of risk. The Claranova SE is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Claranova SE on October 25, 2024 and sell it today you would earn a total of 8.00 from holding Claranova SE or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bains Mer Monaco vs. Claranova SE
Performance |
| Timeline |
| Bains Mer Monaco |
| Claranova SE |
Bains Mer and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bains Mer and Claranova
The main advantage of trading using opposite Bains Mer and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bains Mer position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Bains Mer vs. Compagnie des Alpes | Bains Mer vs. Groupe Partouche SA | Bains Mer vs. Bnteau SA | Bains Mer vs. Boiron SA |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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