Correlation Between SA Catana and Bernard Loisea
Can any of the company-specific risk be diversified away by investing in both SA Catana and Bernard Loisea 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 SA Catana and Bernard Loisea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SA Catana Group and Bernard Loisea, you can compare the effects of market volatilities on SA Catana and Bernard Loisea 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 SA Catana with a short position of Bernard Loisea. Check out your portfolio center. Please also check ongoing floating volatility patterns of SA Catana and Bernard Loisea.
Diversification Opportunities for SA Catana and Bernard Loisea
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CATG and Bernard is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Bernard Loisea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bernard Loisea and SA Catana 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 SA Catana Group are associated (or correlated) with Bernard Loisea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bernard Loisea has no effect on the direction of SA Catana i.e., SA Catana and Bernard Loisea go up and down completely randomly.
Pair Corralation between SA Catana and Bernard Loisea
Assuming the 90 days trading horizon SA Catana Group is expected to generate 0.66 times more return on investment than Bernard Loisea. However, SA Catana Group is 1.51 times less risky than Bernard Loisea. It trades about 0.06 of its potential returns per unit of risk. Bernard Loisea is currently generating about -0.03 per unit of risk. If you would invest 446.00 in SA Catana Group on August 30, 2024 and sell it today you would earn a total of 12.00 from holding SA Catana Group or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SA Catana Group vs. Bernard Loisea
Performance |
| Timeline |
| SA Catana Group |
| Bernard Loisea |
SA Catana and Bernard Loisea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SA Catana and Bernard Loisea
The main advantage of trading using opposite SA Catana and Bernard Loisea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SA Catana position performs unexpectedly, Bernard Loisea 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 Bernard Loisea will offset losses from the drop in Bernard Loisea's long position.| SA Catana vs. Eutelsat Communications SA | SA Catana vs. Affluent Medical SAS | SA Catana vs. Axway Software | SA Catana vs. Diagnostic Medical Systems |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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