Correlation Between Boiron SA and Bains Mer
Can any of the company-specific risk be diversified away by investing in both Boiron SA and Bains Mer 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 Boiron SA and Bains Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and Bains Mer Monaco, you can compare the effects of market volatilities on Boiron SA and Bains Mer 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 Boiron SA with a short position of Bains Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and Bains Mer.
Diversification Opportunities for Boiron SA and Bains Mer
Poor diversification
The 3 months correlation between Boiron and Bains is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and Bains Mer Monaco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bains Mer Monaco and Boiron 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 Boiron SA are associated (or correlated) with Bains Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bains Mer Monaco has no effect on the direction of Boiron SA i.e., Boiron SA and Bains Mer go up and down completely randomly.
Pair Corralation between Boiron SA and Bains Mer
Assuming the 90 days trading horizon Boiron SA is expected to generate 1.57 times more return on investment than Bains Mer. However, Boiron SA is 1.57 times more volatile than Bains Mer Monaco. It trades about -0.01 of its potential returns per unit of risk. Bains Mer Monaco is currently generating about -0.09 per unit of risk. If you would invest 2,780 in Boiron SA on October 25, 2024 and sell it today you would lose (50.00) from holding Boiron SA or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. Bains Mer Monaco
Performance |
| Timeline |
| Boiron SA |
| Bains Mer Monaco |
Boiron SA and Bains Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and Bains Mer
The main advantage of trading using opposite Boiron SA and Bains Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA position performs unexpectedly, Bains Mer 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 Bains Mer will offset losses from the drop in Bains Mer's long position.| Boiron SA vs. Virbac SA | Boiron SA vs. Bonduelle SCA | Boiron SA vs. Biomerieux SA | Boiron SA vs. Guerbet S A |
| Bains Mer vs. Compagnie des Alpes | Bains Mer vs. Groupe Partouche SA | Bains Mer vs. Bnteau SA | Bains Mer vs. Boiron 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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