Correlation Between Bureau Veritas and Rexel SA
Can any of the company-specific risk be diversified away by investing in both Bureau Veritas and Rexel 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 Rexel 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 Rexel SA, you can compare the effects of market volatilities on Bureau Veritas and Rexel 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 Rexel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bureau Veritas and Rexel SA.
Diversification Opportunities for Bureau Veritas and Rexel SA
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bureau and Rexel is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bureau Veritas SA and Rexel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rexel 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 Rexel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rexel SA has no effect on the direction of Bureau Veritas i.e., Bureau Veritas and Rexel SA go up and down completely randomly.
Pair Corralation between Bureau Veritas and Rexel SA
Assuming the 90 days trading horizon Bureau Veritas is expected to generate 1.17 times less return on investment than Rexel SA. But when comparing it to its historical volatility, Bureau Veritas SA is 1.77 times less risky than Rexel SA. It trades about 0.28 of its potential returns per unit of risk. Rexel SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,420 in Rexel SA on October 24, 2024 and sell it today you would earn a total of 142.00 from holding Rexel SA or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bureau Veritas SA vs. Rexel SA
Performance |
| Timeline |
| Bureau Veritas SA |
| Rexel SA |
Bureau Veritas and Rexel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bureau Veritas and Rexel SA
The main advantage of trading using opposite Bureau Veritas and Rexel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bureau Veritas position performs unexpectedly, Rexel 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 Rexel SA will offset losses from the drop in Rexel SA's long position.| Bureau Veritas vs. Edenred SA | Bureau Veritas vs. Legrand SA | Bureau Veritas vs. Sodexo SA | Bureau Veritas vs. Wendel |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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