Correlation Between Balyo SA and Claranova
Can any of the company-specific risk be diversified away by investing in both Balyo SA 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 Balyo SA and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balyo SA and Claranova SE, you can compare the effects of market volatilities on Balyo SA 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 Balyo SA with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balyo SA and Claranova.
Diversification Opportunities for Balyo SA and Claranova
Weak diversification
The 3 months correlation between Balyo and Claranova is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Balyo SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Balyo 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 Balyo SA 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 Balyo SA i.e., Balyo SA and Claranova go up and down completely randomly.
Pair Corralation between Balyo SA and Claranova
Assuming the 90 days trading horizon Balyo SA is expected to generate 1.16 times more return on investment than Claranova. However, Balyo SA is 1.16 times more volatile than Claranova SE. It trades about 0.01 of its potential returns per unit of risk. Claranova SE is currently generating about -0.02 per unit of risk. If you would invest 35.00 in Balyo SA on September 3, 2024 and sell it today you would lose (7.00) from holding Balyo SA or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balyo SA vs. Claranova SE
Performance |
| Timeline |
| Balyo SA |
| Claranova SE |
Balyo SA and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balyo SA and Claranova
The main advantage of trading using opposite Balyo SA and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balyo SA 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.The idea behind Balyo SA and Claranova SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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