Correlation Between Mercialys and Burelle SA
Can any of the company-specific risk be diversified away by investing in both Mercialys and Burelle 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 Mercialys and Burelle SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercialys SA and Burelle SA, you can compare the effects of market volatilities on Mercialys and Burelle 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 Mercialys with a short position of Burelle SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercialys and Burelle SA.
Diversification Opportunities for Mercialys and Burelle SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercialys and Burelle is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Mercialys SA and Burelle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burelle SA and Mercialys 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 Mercialys SA are associated (or correlated) with Burelle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burelle SA has no effect on the direction of Mercialys i.e., Mercialys and Burelle SA go up and down completely randomly.
Pair Corralation between Mercialys and Burelle SA
Assuming the 90 days trading horizon Mercialys SA is expected to generate 0.66 times more return on investment than Burelle SA. However, Mercialys SA is 1.52 times less risky than Burelle SA. It trades about -0.05 of its potential returns per unit of risk. Burelle SA is currently generating about -0.1 per unit of risk. If you would invest 1,168 in Mercialys SA on September 1, 2024 and sell it today you would lose (120.00) from holding Mercialys SA or give up 10.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Mercialys SA vs. Burelle SA
Performance |
| Timeline |
| Mercialys SA |
| Burelle SA |
Mercialys and Burelle SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercialys and Burelle SA
The main advantage of trading using opposite Mercialys and Burelle SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercialys position performs unexpectedly, Burelle 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 Burelle SA will offset losses from the drop in Burelle SA's long position.The idea behind Mercialys SA and Burelle 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.| Burelle SA vs. Compagnie Generale des | Burelle SA vs. Renault SA | Burelle SA vs. Atos SE | Burelle SA vs. Compagnie de Saint Gobain |
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 CEOs Directory module to screen CEOs from public companies around the world.
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