Correlation Between Burelle SA and Compagnie
Can any of the company-specific risk be diversified away by investing in both Burelle SA and Compagnie 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 Burelle SA and Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burelle SA and Compagnie du Cambodge, you can compare the effects of market volatilities on Burelle SA and Compagnie 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 Burelle SA with a short position of Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burelle SA and Compagnie.
Diversification Opportunities for Burelle SA and Compagnie
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Burelle and Compagnie is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Burelle SA and Compagnie du Cambodge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie du Cambodge and Burelle 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 Burelle SA are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie du Cambodge has no effect on the direction of Burelle SA i.e., Burelle SA and Compagnie go up and down completely randomly.
Pair Corralation between Burelle SA and Compagnie
Assuming the 90 days trading horizon Burelle SA is expected to under-perform the Compagnie. But the stock apears to be less risky and, when comparing its historical volatility, Burelle SA is 225.09 times less risky than Compagnie. The stock trades about -0.01 of its potential returns per unit of risk. The Compagnie du Cambodge is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 560,000 in Compagnie du Cambodge on August 27, 2024 and sell it today you would lose (550,500) from holding Compagnie du Cambodge or give up 98.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.05% |
| Values | Daily Returns |
Burelle SA vs. Compagnie du Cambodge
Performance |
| Timeline |
| Burelle SA |
| Compagnie du Cambodge |
Burelle SA and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burelle SA and Compagnie
The main advantage of trading using opposite Burelle SA and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burelle SA position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie's long position.| Burelle SA vs. Savencia SA | Burelle SA vs. Compagnie de lOdet | Burelle SA vs. Akwel SA | Burelle SA vs. Wendel |
| Compagnie vs. Getlink SE | Compagnie vs. Manitou BF SA | Compagnie vs. Ossiam Minimum Variance | Compagnie vs. Granite 3x LVMH |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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