Correlation Between Baumer SA and Biomm SA
Can any of the company-specific risk be diversified away by investing in both Baumer SA and Biomm 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 Baumer SA and Biomm SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baumer SA and Biomm SA, you can compare the effects of market volatilities on Baumer SA and Biomm 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 Baumer SA with a short position of Biomm SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baumer SA and Biomm SA.
Diversification Opportunities for Baumer SA and Biomm SA
Pay attention - limited upside
The 3 months correlation between Baumer and Biomm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Baumer SA and Biomm SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomm SA and Baumer 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 Baumer SA are associated (or correlated) with Biomm SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomm SA has no effect on the direction of Baumer SA i.e., Baumer SA and Biomm SA go up and down completely randomly.
Pair Corralation between Baumer SA and Biomm SA
Assuming the 90 days trading horizon Baumer SA is expected to generate 1.84 times more return on investment than Biomm SA. However, Baumer SA is 1.84 times more volatile than Biomm SA. It trades about 0.02 of its potential returns per unit of risk. Biomm SA is currently generating about -0.17 per unit of risk. If you would invest 1,300 in Baumer SA on August 30, 2024 and sell it today you would lose (12.00) from holding Baumer SA or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Baumer SA vs. Biomm SA
Performance |
| Timeline |
| Baumer SA |
| Biomm SA |
Baumer SA and Biomm SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baumer SA and Biomm SA
The main advantage of trading using opposite Baumer SA and Biomm SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baumer SA position performs unexpectedly, Biomm 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 Biomm SA will offset losses from the drop in Biomm SA's long position.| Baumer SA vs. Fleury SA | Baumer SA vs. Baumer SA | Baumer SA vs. Energisa SA | Baumer SA vs. BTG Pactual Logstica |
| Biomm SA vs. M Dias Branco | Biomm SA vs. Porto Seguro SA | Biomm SA vs. Grendene SA | Biomm SA vs. Hypera 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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