Correlation Between Boiron SA and British American
Can any of the company-specific risk be diversified away by investing in both Boiron SA and British American 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 British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boiron SA and British American Tobacco, you can compare the effects of market volatilities on Boiron SA and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boiron SA and British American.
Diversification Opportunities for Boiron SA and British American
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boiron and British is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Boiron SA and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Boiron SA i.e., Boiron SA and British American go up and down completely randomly.
Pair Corralation between Boiron SA and British American
Assuming the 90 days horizon Boiron SA is expected to under-perform the British American. In addition to that, Boiron SA is 1.32 times more volatile than British American Tobacco. It trades about -0.4 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.64 per unit of volatility. If you would invest 3,206 in British American Tobacco on August 25, 2024 and sell it today you would earn a total of 374.00 from holding British American Tobacco or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boiron SA vs. British American Tobacco
Performance |
| Timeline |
| Boiron SA |
| British American Tobacco |
Boiron SA and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boiron SA and British American
The main advantage of trading using opposite Boiron SA and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boiron SA position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Boiron SA vs. Hemisphere Energy Corp | Boiron SA vs. LG Display Co | Boiron SA vs. Ribbon Communications | Boiron SA vs. Verizon Communications |
| British American vs. Plastic Omnium | British American vs. United States Steel | British American vs. GFL ENVIRONM | British American 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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