Correlation Between Infotel SA and Bourse Direct
Can any of the company-specific risk be diversified away by investing in both Infotel SA and Bourse Direct 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 Infotel SA and Bourse Direct into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Infotel SA and Bourse Direct SA, you can compare the effects of market volatilities on Infotel SA and Bourse Direct 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 Infotel SA with a short position of Bourse Direct. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infotel SA and Bourse Direct.
Diversification Opportunities for Infotel SA and Bourse Direct
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Infotel and Bourse is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Infotel SA and Bourse Direct SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bourse Direct SA and Infotel 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 Infotel SA are associated (or correlated) with Bourse Direct. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bourse Direct SA has no effect on the direction of Infotel SA i.e., Infotel SA and Bourse Direct go up and down completely randomly.
Pair Corralation between Infotel SA and Bourse Direct
Assuming the 90 days trading horizon Infotel SA is expected to generate 0.64 times more return on investment than Bourse Direct. However, Infotel SA is 1.56 times less risky than Bourse Direct. It trades about -0.17 of its potential returns per unit of risk. Bourse Direct SA is currently generating about -0.11 per unit of risk. If you would invest 4,260 in Infotel SA on August 30, 2024 and sell it today you would lose (210.00) from holding Infotel SA or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Infotel SA vs. Bourse Direct SA
Performance |
| Timeline |
| Infotel SA |
| Bourse Direct SA |
Infotel SA and Bourse Direct Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Infotel SA and Bourse Direct
The main advantage of trading using opposite Infotel SA and Bourse Direct positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infotel SA position performs unexpectedly, Bourse Direct 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 Bourse Direct will offset losses from the drop in Bourse Direct's long position.The idea behind Infotel SA and Bourse Direct 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.| Bourse Direct vs. BigBen Interactive | Bourse Direct vs. ABC arbitrage SA | Bourse Direct vs. CBO Territoria SA | Bourse Direct vs. Aurea SA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |