Correlation Between Baumer SA and Cable One
Can any of the company-specific risk be diversified away by investing in both Baumer SA and Cable One 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 Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baumer SA and Cable One, you can compare the effects of market volatilities on Baumer SA and Cable One 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 Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baumer SA and Cable One.
Diversification Opportunities for Baumer SA and Cable One
Excellent diversification
The 3 months correlation between Baumer and Cable is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Baumer SA and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One 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 Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of Baumer SA i.e., Baumer SA and Cable One go up and down completely randomly.
Pair Corralation between Baumer SA and Cable One
Assuming the 90 days trading horizon Baumer SA is expected to generate 0.41 times more return on investment than Cable One. However, Baumer SA is 2.45 times less risky than Cable One. It trades about 0.0 of its potential returns per unit of risk. Cable One is currently generating about -0.29 per unit of risk. If you would invest 1,075 in Baumer SA on November 28, 2024 and sell it today you would lose (5.00) from holding Baumer SA or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baumer SA vs. Cable One
Performance |
| Timeline |
| Baumer SA |
| Cable One |
Baumer SA and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baumer SA and Cable One
The main advantage of trading using opposite Baumer SA and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baumer SA position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Bardella SA Indstrias | Baumer SA vs. Banco Alfa de |
| Cable One vs. Raytheon Technologies | Cable One vs. Spotify Technology SA | Cable One vs. BIONTECH SE DRN | Cable One vs. Guidewire Software, |
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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