Correlation Between Etablissements Maurel and Bnteau SA
Can any of the company-specific risk be diversified away by investing in both Etablissements Maurel and Bnteau 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 Etablissements Maurel and Bnteau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etablissements Maurel et and Bnteau SA, you can compare the effects of market volatilities on Etablissements Maurel and Bnteau 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 Etablissements Maurel with a short position of Bnteau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissements Maurel and Bnteau SA.
Diversification Opportunities for Etablissements Maurel and Bnteau SA
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Etablissements and Bnteau is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Etablissements Maurel 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 Etablissements Maurel et are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and Bnteau SA go up and down completely randomly.
Pair Corralation between Etablissements Maurel and Bnteau SA
Assuming the 90 days trading horizon Etablissements Maurel et is expected to generate 0.67 times more return on investment than Bnteau SA. However, Etablissements Maurel et is 1.5 times less risky than Bnteau SA. It trades about -0.08 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.1 per unit of risk. If you would invest 629.00 in Etablissements Maurel et on August 28, 2024 and sell it today you would lose (123.00) from holding Etablissements Maurel et or give up 19.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissements Maurel et vs. Bnteau SA
Performance |
| Timeline |
| Etablissements Maurel |
| Bnteau SA |
Etablissements Maurel and Bnteau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissements Maurel and Bnteau SA
The main advantage of trading using opposite Etablissements Maurel and Bnteau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissements Maurel position performs unexpectedly, Bnteau 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 Bnteau SA will offset losses from the drop in Bnteau SA's long position.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans SA |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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