Correlation Between Derichebourg and Manitou BF
Can any of the company-specific risk be diversified away by investing in both Derichebourg and Manitou BF 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 Derichebourg and Manitou BF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derichebourg and Manitou BF SA, you can compare the effects of market volatilities on Derichebourg and Manitou BF 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 Derichebourg with a short position of Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derichebourg and Manitou BF.
Diversification Opportunities for Derichebourg and Manitou BF
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Derichebourg and Manitou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA and Derichebourg 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 Derichebourg are associated (or correlated) with Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Derichebourg i.e., Derichebourg and Manitou BF go up and down completely randomly.
Pair Corralation between Derichebourg and Manitou BF
Assuming the 90 days trading horizon Derichebourg is expected to generate 13.75 times less return on investment than Manitou BF. But when comparing it to its historical volatility, Derichebourg is 1.56 times less risky than Manitou BF. It trades about 0.05 of its potential returns per unit of risk. Manitou BF SA is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,624 in Manitou BF SA on October 25, 2024 and sell it today you would earn a total of 366.00 from holding Manitou BF SA or generate 22.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derichebourg vs. Manitou BF SA
Performance |
| Timeline |
| Derichebourg |
| Manitou BF SA |
Derichebourg and Manitou BF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derichebourg and Manitou BF
The main advantage of trading using opposite Derichebourg and Manitou BF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derichebourg position performs unexpectedly, Manitou BF 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 Manitou BF will offset losses from the drop in Manitou BF's long position.| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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