Correlation Between Boiron SA and Bonduelle SCA
Can any of the company-specific risk be diversified away by investing in both Boiron SA and Bonduelle SCA 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 Bonduelle SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and Bonduelle SCA, you can compare the effects of market volatilities on Boiron SA and Bonduelle SCA 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 Bonduelle SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and Bonduelle SCA.
Diversification Opportunities for Boiron SA and Bonduelle SCA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Boiron and Bonduelle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and Bonduelle SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonduelle SCA 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 Bonduelle SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonduelle SCA has no effect on the direction of Boiron SA i.e., Boiron SA and Bonduelle SCA go up and down completely randomly.
Pair Corralation between Boiron SA and Bonduelle SCA
Assuming the 90 days trading horizon Boiron SA is expected to under-perform the Bonduelle SCA. In addition to that, Boiron SA is 1.92 times more volatile than Bonduelle SCA. It trades about -0.52 of its total potential returns per unit of risk. Bonduelle SCA is currently generating about -0.26 per unit of volatility. If you would invest 681.00 in Bonduelle SCA on August 30, 2024 and sell it today you would lose (34.00) from holding Bonduelle SCA or give up 4.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. Bonduelle SCA
Performance |
| Timeline |
| Boiron SA |
| Bonduelle SCA |
Boiron SA and Bonduelle SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and Bonduelle SCA
The main advantage of trading using opposite Boiron SA and Bonduelle SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA position performs unexpectedly, Bonduelle SCA 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 Bonduelle SCA will offset losses from the drop in Bonduelle SCA's long position.| Boiron SA vs. Bonduelle SCA | Boiron SA vs. Biomerieux SA | Boiron SA vs. Guerbet S A | Boiron SA vs. Socit BIC SA |
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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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