Correlation Between Bombril SA and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Bombril SA and Baumer 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 Bombril SA and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bombril SA and Baumer SA, you can compare the effects of market volatilities on Bombril SA and Baumer 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 Bombril SA with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bombril SA and Baumer SA.
Diversification Opportunities for Bombril SA and Baumer SA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bombril and Baumer is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bombril SA and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Bombril 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 Bombril SA are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Bombril SA i.e., Bombril SA and Baumer SA go up and down completely randomly.
Pair Corralation between Bombril SA and Baumer SA
Assuming the 90 days trading horizon Bombril SA is expected to under-perform the Baumer SA. In addition to that, Bombril SA is 1.55 times more volatile than Baumer SA. It trades about -0.39 of its total potential returns per unit of risk. Baumer SA is currently generating about 0.14 per unit of volatility. If you would invest 1,030 in Baumer SA on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Baumer SA or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bombril SA vs. Baumer SA
Performance |
| Timeline |
| Bombril SA |
| Baumer SA |
Bombril SA and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bombril SA and Baumer SA
The main advantage of trading using opposite Bombril SA and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bombril SA position performs unexpectedly, Baumer 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Bombril SA vs. Eternit SA | Bombril SA vs. Lupatech SA | Bombril SA vs. Inepar SA Indstria | Bombril SA vs. Marcopolo SA |
| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Bardella SA Indstrias | Baumer SA vs. Banco Alfa 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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