Correlation Between Belite Bio and Acciona SA
Can any of the company-specific risk be diversified away by investing in both Belite Bio and Acciona SA 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 Belite Bio and Acciona SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belite Bio ADR and Acciona SA, you can compare the effects of market volatilities on Belite Bio and Acciona SA 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 Belite Bio with a short position of Acciona SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belite Bio and Acciona SA.
Diversification Opportunities for Belite Bio and Acciona SA
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Belite and Acciona is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Belite Bio ADR and Acciona SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acciona SA and Belite Bio 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 Belite Bio ADR are associated (or correlated) with Acciona SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acciona SA has no effect on the direction of Belite Bio i.e., Belite Bio and Acciona SA go up and down completely randomly.
Pair Corralation between Belite Bio and Acciona SA
Given the investment horizon of 90 days Belite Bio is expected to generate 8.67 times less return on investment than Acciona SA. In addition to that, Belite Bio is 1.02 times more volatile than Acciona SA. It trades about 0.0 of its total potential returns per unit of risk. Acciona SA is currently generating about 0.03 per unit of volatility. If you would invest 11,168 in Acciona SA on November 27, 2024 and sell it today you would earn a total of 118.00 from holding Acciona SA or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belite Bio ADR vs. Acciona SA
Performance |
| Timeline |
| Belite Bio ADR |
| Acciona SA |
Belite Bio and Acciona SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belite Bio and Acciona SA
The main advantage of trading using opposite Belite Bio and Acciona SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belite Bio position performs unexpectedly, Acciona SA 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 Acciona SA will offset losses from the drop in Acciona SA's long position.| Belite Bio vs. Anebulo Pharmaceuticals | Belite Bio vs. Mineralys Therapeutics, Common | Belite Bio vs. AN2 Therapeutics | Belite Bio vs. Aerovate Therapeutics |
| Acciona SA vs. JGC Corp | Acciona SA vs. ACS Actividades de | Acciona SA vs. Kajima Corp ADR | Acciona SA vs. ACS Actividades De |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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