Correlation Between Fleury SA and Baumer SA
Can any of the company-specific risk be diversified away by investing in both Fleury SA and Baumer 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 Fleury SA and Baumer SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fleury SA and Baumer SA, you can compare the effects of market volatilities on Fleury SA and Baumer 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 Fleury SA with a short position of Baumer SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fleury SA and Baumer SA.
Diversification Opportunities for Fleury SA and Baumer SA
Poor diversification
The 3 months correlation between Fleury and Baumer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Fleury SA and Baumer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baumer SA and Fleury SA 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 Fleury SA are associated (or correlated) with Baumer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baumer SA has no effect on the direction of Fleury SA i.e., Fleury SA and Baumer SA go up and down completely randomly.
Pair Corralation between Fleury SA and Baumer SA
Assuming the 90 days trading horizon Fleury SA is expected to under-perform the Baumer SA. But the stock apears to be less risky and, when comparing its historical volatility, Fleury SA is 1.87 times less risky than Baumer SA. The stock trades about -0.05 of its potential returns per unit of risk. The Baumer SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Baumer SA on August 26, 2024 and sell it today you would earn a total of 144.00 from holding Baumer SA or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fleury SA vs. Baumer SA
Performance |
| Timeline |
| Fleury SA |
| Baumer SA |
Fleury SA and Baumer SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fleury SA and Baumer SA
The main advantage of trading using opposite Fleury SA and Baumer SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fleury SA position performs unexpectedly, Baumer 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 Baumer SA will offset losses from the drop in Baumer SA's long position.| Fleury SA vs. Engie Brasil Energia | Fleury SA vs. WEG SA | Fleury SA vs. Ambev SA | Fleury SA vs. M Dias Branco |
| Baumer SA vs. Baumer SA | Baumer SA vs. Biomm SA | Baumer SA vs. Bardella SA Indstrias | Baumer SA vs. Banco Alfa de |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |