Correlation Between Bnteau SA and JC Decaux
Can any of the company-specific risk be diversified away by investing in both Bnteau SA and JC Decaux 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 JC Decaux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bnteau SA and JC Decaux SA, you can compare the effects of market volatilities on Bnteau SA and JC Decaux 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 JC Decaux. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bnteau SA and JC Decaux.
Diversification Opportunities for Bnteau SA and JC Decaux
Poor diversification
The 3 months correlation between Bnteau and DEC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bnteau SA and JC Decaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Decaux SA 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 JC Decaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Decaux SA has no effect on the direction of Bnteau SA i.e., Bnteau SA and JC Decaux go up and down completely randomly.
Pair Corralation between Bnteau SA and JC Decaux
Assuming the 90 days trading horizon Bnteau SA is expected to generate 3.75 times more return on investment than JC Decaux. However, Bnteau SA is 3.75 times more volatile than JC Decaux SA. It trades about 0.12 of its potential returns per unit of risk. JC Decaux SA is currently generating about -0.11 per unit of risk. If you would invest 916.00 in Bnteau SA on November 28, 2024 and sell it today you would earn a total of 92.00 from holding Bnteau SA or generate 10.04% 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. JC Decaux SA
Performance |
| Timeline |
| Bnteau SA |
| JC Decaux SA |
Bnteau SA and JC Decaux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bnteau SA and JC Decaux
The main advantage of trading using opposite Bnteau SA and JC Decaux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bnteau SA position performs unexpectedly, JC Decaux 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 JC Decaux will offset losses from the drop in JC Decaux's long position.| Bnteau SA vs. Trigano SA | Bnteau SA vs. Bonduelle SCA | Bnteau SA vs. Socit BIC SA | Bnteau SA vs. Imerys SA |
| JC Decaux vs. Publicis Groupe SA | JC Decaux vs. Lagardere SCA | JC Decaux vs. Sodexo SA | JC Decaux vs. Imerys 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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