Correlation Between Belite Bio and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Belite Bio and Vinci 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 Vinci 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 Vinci SA ADR, you can compare the effects of market volatilities on Belite Bio and Vinci 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belite Bio and Vinci SA.
Diversification Opportunities for Belite Bio and Vinci SA
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Belite and Vinci is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Belite Bio ADR and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of Belite Bio i.e., Belite Bio and Vinci SA go up and down completely randomly.
Pair Corralation between Belite Bio and Vinci SA
Given the investment horizon of 90 days Belite Bio ADR is expected to generate 2.03 times more return on investment than Vinci SA. However, Belite Bio is 2.03 times more volatile than Vinci SA ADR. It trades about 0.1 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.09 per unit of risk. If you would invest 4,895 in Belite Bio ADR on August 29, 2024 and sell it today you would earn a total of 1,849 from holding Belite Bio ADR or generate 37.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belite Bio ADR vs. Vinci SA ADR
Performance |
| Timeline |
| Belite Bio ADR |
| Vinci SA ADR |
Belite Bio and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belite Bio and Vinci SA
The main advantage of trading using opposite Belite Bio and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belite Bio position performs unexpectedly, Vinci 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 Vinci SA will offset losses from the drop in Vinci 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 |
| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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