Correlation Between Boiron SA and Linedata Services
Can any of the company-specific risk be diversified away by investing in both Boiron SA and Linedata Services 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 Linedata Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and Linedata Services SA, you can compare the effects of market volatilities on Boiron SA and Linedata Services 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 Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and Linedata Services.
Diversification Opportunities for Boiron SA and Linedata Services
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boiron and Linedata is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Boiron SA i.e., Boiron SA and Linedata Services go up and down completely randomly.
Pair Corralation between Boiron SA and Linedata Services
Assuming the 90 days trading horizon Boiron SA is expected to under-perform the Linedata Services. In addition to that, Boiron SA is 1.19 times more volatile than Linedata Services SA. It trades about -0.01 of its total potential returns per unit of risk. Linedata Services SA is currently generating about 0.08 per unit of volatility. If you would invest 4,309 in Linedata Services SA on September 3, 2024 and sell it today you would earn a total of 3,691 from holding Linedata Services SA or generate 85.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. Linedata Services SA
Performance |
| Timeline |
| Boiron SA |
| Linedata Services |
Boiron SA and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and Linedata Services
The main advantage of trading using opposite Boiron SA and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| Boiron SA vs. Virbac SA | Boiron SA vs. Bonduelle SCA | Boiron SA vs. Biomerieux SA | Boiron SA vs. Guerbet S A |
| Linedata Services vs. Sword Group SE | Linedata Services vs. Lectra SA | Linedata Services vs. Neurones | Linedata Services vs. Aubay Socit Anonyme |
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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