Correlation Between Edesa Holding and Boldt SA
Can any of the company-specific risk be diversified away by investing in both Edesa Holding and Boldt 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 Edesa Holding and Boldt SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edesa Holding SA and Boldt SA, you can compare the effects of market volatilities on Edesa Holding and Boldt 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 Edesa Holding with a short position of Boldt SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edesa Holding and Boldt SA.
Diversification Opportunities for Edesa Holding and Boldt SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edesa and Boldt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Edesa Holding SA and Boldt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boldt SA and Edesa Holding 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 Edesa Holding SA are associated (or correlated) with Boldt SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boldt SA has no effect on the direction of Edesa Holding i.e., Edesa Holding and Boldt SA go up and down completely randomly.
Pair Corralation between Edesa Holding and Boldt SA
Assuming the 90 days trading horizon Edesa Holding is expected to generate 31.38 times less return on investment than Boldt SA. But when comparing it to its historical volatility, Edesa Holding SA is 23.34 times less risky than Boldt SA. It trades about 0.06 of its potential returns per unit of risk. Boldt SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,170 in Boldt SA on September 14, 2024 and sell it today you would earn a total of 3,130 from holding Boldt SA or generate 144.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Edesa Holding SA vs. Boldt SA
Performance |
| Timeline |
| Edesa Holding SA |
| Boldt SA |
Edesa Holding and Boldt SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edesa Holding and Boldt SA
The main advantage of trading using opposite Edesa Holding and Boldt SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edesa Holding position performs unexpectedly, Boldt 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 Boldt SA will offset losses from the drop in Boldt SA's long position.| Edesa Holding vs. Harmony Gold Mining | Edesa Holding vs. Agrometal SAI | Edesa Holding vs. United States Steel | Edesa Holding vs. Transportadora de Gas |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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