Correlation Between Maisons Du and Bains Mer
Can any of the company-specific risk be diversified away by investing in both Maisons Du and Bains Mer 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 Maisons Du and Bains Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maisons du Monde and Bains Mer Monaco, you can compare the effects of market volatilities on Maisons Du and Bains Mer 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 Maisons Du with a short position of Bains Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maisons Du and Bains Mer.
Diversification Opportunities for Maisons Du and Bains Mer
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maisons and Bains is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Maisons du Monde and Bains Mer Monaco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bains Mer Monaco and Maisons Du 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 Maisons du Monde are associated (or correlated) with Bains Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bains Mer Monaco has no effect on the direction of Maisons Du i.e., Maisons Du and Bains Mer go up and down completely randomly.
Pair Corralation between Maisons Du and Bains Mer
Assuming the 90 days trading horizon Maisons du Monde is expected to generate 1.74 times more return on investment than Bains Mer. However, Maisons Du is 1.74 times more volatile than Bains Mer Monaco. It trades about 0.37 of its potential returns per unit of risk. Bains Mer Monaco is currently generating about -0.05 per unit of risk. If you would invest 346.00 in Maisons du Monde on September 19, 2024 and sell it today you would earn a total of 82.00 from holding Maisons du Monde or generate 23.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maisons du Monde vs. Bains Mer Monaco
Performance |
| Timeline |
| Maisons du Monde |
| Bains Mer Monaco |
Maisons Du and Bains Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maisons Du and Bains Mer
The main advantage of trading using opposite Maisons Du and Bains Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maisons Du position performs unexpectedly, Bains Mer 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 Bains Mer will offset losses from the drop in Bains Mer's long position.| Maisons Du vs. Fnac Darty SA | Maisons Du vs. Trigano SA | Maisons Du vs. Elis SA | Maisons Du vs. Derichebourg |
| Bains Mer vs. SA Catana Group | Bains Mer vs. Verallia | Bains Mer vs. Thermador Groupe SA | Bains Mer vs. Maisons du Monde |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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