Correlation Between BigBen Interactive and Derichebourg
Can any of the company-specific risk be diversified away by investing in both BigBen Interactive and Derichebourg 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 BigBen Interactive and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BigBen Interactive and Derichebourg, you can compare the effects of market volatilities on BigBen Interactive and Derichebourg 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 BigBen Interactive with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of BigBen Interactive and Derichebourg.
Diversification Opportunities for BigBen Interactive and Derichebourg
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BigBen and Derichebourg is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BigBen Interactive and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and BigBen Interactive 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 BigBen Interactive are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of BigBen Interactive i.e., BigBen Interactive and Derichebourg go up and down completely randomly.
Pair Corralation between BigBen Interactive and Derichebourg
Assuming the 90 days trading horizon BigBen Interactive is expected to under-perform the Derichebourg. But the stock apears to be less risky and, when comparing its historical volatility, BigBen Interactive is 1.49 times less risky than Derichebourg. The stock trades about -0.72 of its potential returns per unit of risk. The Derichebourg is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 515.00 in Derichebourg on August 31, 2024 and sell it today you would lose (57.00) from holding Derichebourg or give up 11.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BigBen Interactive vs. Derichebourg
Performance |
| Timeline |
| BigBen Interactive |
| Derichebourg |
BigBen Interactive and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BigBen Interactive and Derichebourg
The main advantage of trading using opposite BigBen Interactive and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BigBen Interactive position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| BigBen Interactive vs. Nacon Sa | BigBen Interactive vs. Chargeurs SA | BigBen Interactive vs. Claranova SE | BigBen Interactive vs. Trigano SA |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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