Correlation Between Guerbet S and Manitou BF
Can any of the company-specific risk be diversified away by investing in both Guerbet S 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 Guerbet S and Manitou BF 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 Manitou BF SA, you can compare the effects of market volatilities on Guerbet S 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 Guerbet S with a short position of Manitou BF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Manitou BF.
Diversification Opportunities for Guerbet S and Manitou BF
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guerbet and Manitou is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A 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 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 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 Guerbet S i.e., Guerbet S and Manitou BF go up and down completely randomly.
Pair Corralation between Guerbet S and Manitou BF
Assuming the 90 days trading horizon Guerbet S A is expected to under-perform the Manitou BF. But the stock apears to be less risky and, when comparing its historical volatility, Guerbet S A is 1.21 times less risky than Manitou BF. The stock trades about -0.66 of its potential returns per unit of risk. The Manitou BF SA is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 1,704 in Manitou BF SA on August 30, 2024 and sell it today you would lose (134.00) from holding Manitou BF SA or give up 7.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guerbet S A vs. Manitou BF SA
Performance |
| Timeline |
| Guerbet S A |
| Manitou BF SA |
Guerbet S and Manitou BF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guerbet S and Manitou BF
The main advantage of trading using opposite Guerbet S and Manitou BF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guerbet S 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.The idea behind Guerbet S A and Manitou BF 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.| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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