Correlation Between BS Group and Corbion NV
Can any of the company-specific risk be diversified away by investing in both BS Group and Corbion NV 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 BS Group and Corbion NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BS Group SA and Corbion NV, you can compare the effects of market volatilities on BS Group and Corbion NV 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 BS Group with a short position of Corbion NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BS Group and Corbion NV.
Diversification Opportunities for BS Group and Corbion NV
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BSGR and Corbion is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding BS Group SA and Corbion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corbion NV and BS Group 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 BS Group SA are associated (or correlated) with Corbion NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corbion NV has no effect on the direction of BS Group i.e., BS Group and Corbion NV go up and down completely randomly.
Pair Corralation between BS Group and Corbion NV
Assuming the 90 days trading horizon BS Group SA is expected to generate 1.1 times more return on investment than Corbion NV. However, BS Group is 1.1 times more volatile than Corbion NV. It trades about -0.02 of its potential returns per unit of risk. Corbion NV is currently generating about -0.03 per unit of risk. If you would invest 475.00 in BS Group SA on September 2, 2024 and sell it today you would lose (18.00) from holding BS Group SA or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BS Group SA vs. Corbion NV
Performance |
| Timeline |
| BS Group SA |
| Corbion NV |
BS Group and Corbion NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BS Group and Corbion NV
The main advantage of trading using opposite BS Group and Corbion NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BS Group position performs unexpectedly, Corbion NV 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 Corbion NV will offset losses from the drop in Corbion NV's long position.| BS Group vs. ForFarmers NV | BS Group vs. Sligro Food Group | BS Group vs. Amsterdam Commodities NV | BS Group vs. Brunel International NV |
| Corbion NV vs. Flow Traders BV | Corbion NV vs. Aalberts Industries NV | Corbion NV vs. ForFarmers NV | Corbion NV vs. TKH Group NV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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