Correlation Between Bnteau SA and Fountaine Pajo
Can any of the company-specific risk be diversified away by investing in both Bnteau SA and Fountaine Pajo 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 Bnteau SA and Fountaine Pajo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bnteau SA and Fountaine Pajo, you can compare the effects of market volatilities on Bnteau SA and Fountaine Pajo 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 Bnteau SA with a short position of Fountaine Pajo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bnteau SA and Fountaine Pajo.
Diversification Opportunities for Bnteau SA and Fountaine Pajo
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bnteau and Fountaine is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bnteau SA and Fountaine Pajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fountaine Pajo and Bnteau 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 Bnteau SA are associated (or correlated) with Fountaine Pajo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fountaine Pajo has no effect on the direction of Bnteau SA i.e., Bnteau SA and Fountaine Pajo go up and down completely randomly.
Pair Corralation between Bnteau SA and Fountaine Pajo
Assuming the 90 days trading horizon Bnteau SA is expected to generate 2.31 times more return on investment than Fountaine Pajo. However, Bnteau SA is 2.31 times more volatile than Fountaine Pajo. It trades about 0.04 of its potential returns per unit of risk. Fountaine Pajo is currently generating about -0.02 per unit of risk. If you would invest 806.00 in Bnteau SA on September 12, 2024 and sell it today you would earn a total of 53.00 from holding Bnteau SA or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bnteau SA vs. Fountaine Pajo
Performance |
| Timeline |
| Bnteau SA |
| Fountaine Pajo |
Bnteau SA and Fountaine Pajo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bnteau SA and Fountaine Pajo
The main advantage of trading using opposite Bnteau SA and Fountaine Pajo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bnteau SA position performs unexpectedly, Fountaine Pajo 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 Fountaine Pajo will offset losses from the drop in Fountaine Pajo's long position.| Bnteau SA vs. Trigano SA | Bnteau SA vs. Bonduelle SCA | Bnteau SA vs. Socit BIC SA | Bnteau SA vs. Imerys SA |
| Fountaine Pajo vs. SA Catana Group | Fountaine Pajo vs. Trigano SA | Fountaine Pajo vs. Bnteau SA | Fountaine Pajo vs. Piscines Desjoyaux 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 Stocks Directory module to find actively traded stocks across global markets.
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