Correlation Between SEB SA and BIALETTI INDUSTRIE
Can any of the company-specific risk be diversified away by investing in both SEB SA and BIALETTI INDUSTRIE 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 SEB SA and BIALETTI INDUSTRIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEB SA and BIALETTI INDUSTRIE, you can compare the effects of market volatilities on SEB SA and BIALETTI INDUSTRIE 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 SEB SA with a short position of BIALETTI INDUSTRIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEB SA and BIALETTI INDUSTRIE.
Diversification Opportunities for SEB SA and BIALETTI INDUSTRIE
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SEB and BIALETTI is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SEB SA and BIALETTI INDUSTRIE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIALETTI INDUSTRIE and SEB 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 SEB SA are associated (or correlated) with BIALETTI INDUSTRIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIALETTI INDUSTRIE has no effect on the direction of SEB SA i.e., SEB SA and BIALETTI INDUSTRIE go up and down completely randomly.
Pair Corralation between SEB SA and BIALETTI INDUSTRIE
Assuming the 90 days horizon SEB SA is expected to under-perform the BIALETTI INDUSTRIE. But the stock apears to be less risky and, when comparing its historical volatility, SEB SA is 3.69 times less risky than BIALETTI INDUSTRIE. The stock trades about -0.65 of its potential returns per unit of risk. The BIALETTI INDUSTRIE is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 23.00 in BIALETTI INDUSTRIE on October 16, 2024 and sell it today you would lose (1.00) from holding BIALETTI INDUSTRIE or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SEB SA vs. BIALETTI INDUSTRIE
Performance |
| Timeline |
| SEB SA |
| BIALETTI INDUSTRIE |
SEB SA and BIALETTI INDUSTRIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SEB SA and BIALETTI INDUSTRIE
The main advantage of trading using opposite SEB SA and BIALETTI INDUSTRIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEB SA position performs unexpectedly, BIALETTI INDUSTRIE 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 BIALETTI INDUSTRIE will offset losses from the drop in BIALETTI INDUSTRIE's long position.The idea behind SEB SA and BIALETTI INDUSTRIE 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.| BIALETTI INDUSTRIE vs. AAC TECHNOLOGHLDGADR | BIALETTI INDUSTRIE vs. Granite Construction | BIALETTI INDUSTRIE vs. VELA TECHNOLPLC LS 0001 | BIALETTI INDUSTRIE vs. Hanison Construction Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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