Correlation Between Bureau Veritas and Arkema SA
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and Arkema SA 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 Bureau Veritas and Arkema SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bureau Veritas SA and Arkema SA, you can compare the effects of market volatilities on Bureau Veritas and Arkema SA 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 Bureau Veritas with a short position of Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and Arkema SA.
Diversification Opportunities for Bureau Veritas and Arkema SA
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bureau and Arkema is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and Arkema SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA and Bureau Veritas 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 Bureau Veritas SA are associated (or correlated) with Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and Arkema SA go up and down completely randomly.
Pair Corralation between Bureau Veritas and Arkema SA
Assuming the 90 days trading horizon Bureau Veritas is expected to generate 1.66 times less return on investment than Arkema SA. But when comparing it to its historical volatility, Bureau Veritas SA is 1.63 times less risky than Arkema SA. It trades about 0.15 of its potential returns per unit of risk. Arkema SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,160 in Arkema SA on October 26, 2024 and sell it today you would earn a total of 340.00 from holding Arkema SA or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bureau Veritas SA vs. Arkema SA
Performance |
| Timeline |
| Bureau Veritas SA |
| Arkema SA |
Bureau Veritas and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and Arkema SA
The main advantage of trading using opposite Bureau Veritas and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA's long position.| Bureau Veritas vs. Edenred SA | Bureau Veritas vs. Legrand SA | Bureau Veritas vs. Sodexo SA | Bureau Veritas vs. Wendel |
| Arkema SA vs. Legrand SA | Arkema SA vs. Eiffage SA | Arkema SA vs. Imerys SA | Arkema SA vs. Bureau Veritas 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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