Correlation Between Wendel and Bureau Veritas
Can any of the company-specific risk be diversified away by investing in both Wendel and Bureau Veritas 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 Wendel and Bureau Veritas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wendel and Bureau Veritas SA, you can compare the effects of market volatilities on Wendel and Bureau Veritas 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 Wendel with a short position of Bureau Veritas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wendel and Bureau Veritas.
Diversification Opportunities for Wendel and Bureau Veritas
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wendel and Bureau is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wendel and Bureau Veritas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bureau Veritas SA and Wendel 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 Wendel are associated (or correlated) with Bureau Veritas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bureau Veritas SA has no effect on the direction of Wendel i.e., Wendel and Bureau Veritas go up and down completely randomly.
Pair Corralation between Wendel and Bureau Veritas
Assuming the 90 days horizon Wendel is expected to generate 1.06 times more return on investment than Bureau Veritas. However, Wendel is 1.06 times more volatile than Bureau Veritas SA. It trades about 0.41 of its potential returns per unit of risk. Bureau Veritas SA is currently generating about 0.28 per unit of risk. If you would invest 9,115 in Wendel on October 24, 2024 and sell it today you would earn a total of 740.00 from holding Wendel or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wendel vs. Bureau Veritas SA
Performance |
| Timeline |
| Wendel |
| Bureau Veritas SA |
Wendel and Bureau Veritas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wendel and Bureau Veritas
The main advantage of trading using opposite Wendel and Bureau Veritas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendel position performs unexpectedly, Bureau Veritas 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 Bureau Veritas will offset losses from the drop in Bureau Veritas' long position.The idea behind Wendel and Bureau Veritas 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.| Bureau Veritas vs. Edenred SA | Bureau Veritas vs. Legrand SA | Bureau Veritas vs. Sodexo SA | Bureau Veritas vs. Wendel |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |