Correlation Between Guerbet S and Socit BIC
Can any of the company-specific risk be diversified away by investing in both Guerbet S and Socit BIC 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 Guerbet S and Socit BIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guerbet S A and Socit BIC SA, you can compare the effects of market volatilities on Guerbet S and Socit BIC 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 Guerbet S with a short position of Socit BIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Socit BIC.
Diversification Opportunities for Guerbet S and Socit BIC
Excellent diversification
The 3 months correlation between Guerbet and Socit is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Socit BIC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit BIC SA and Guerbet S 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 Guerbet S A are associated (or correlated) with Socit BIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit BIC SA has no effect on the direction of Guerbet S i.e., Guerbet S and Socit BIC go up and down completely randomly.
Pair Corralation between Guerbet S and Socit BIC
Assuming the 90 days trading horizon Guerbet S A is expected to under-perform the Socit BIC. In addition to that, Guerbet S is 1.9 times more volatile than Socit BIC SA. It trades about -0.51 of its total potential returns per unit of risk. Socit BIC SA is currently generating about -0.31 per unit of volatility. If you would invest 6,710 in Socit BIC SA on September 1, 2024 and sell it today you would lose (400.00) from holding Socit BIC SA or give up 5.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guerbet S A vs. Socit BIC SA
Performance |
| Timeline |
| Guerbet S A |
| Socit BIC SA |
Guerbet S and Socit BIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guerbet S and Socit BIC
The main advantage of trading using opposite Guerbet S and Socit BIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guerbet S position performs unexpectedly, Socit BIC 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 Socit BIC will offset losses from the drop in Socit BIC's long position.The idea behind Guerbet S A and Socit BIC SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Socit BIC vs. LVMH Mot Hennessy | Socit BIC vs. Danone SA | Socit BIC vs. Air Liquide SA | Socit BIC vs. Hermes International SCA |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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