Correlation Between BEBO Health and Air France
Can any of the company-specific risk be diversified away by investing in both BEBO Health and Air France 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 BEBO Health and Air France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEBO Health SA and Air France KLM SA, you can compare the effects of market volatilities on BEBO Health and Air France 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 BEBO Health with a short position of Air France. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEBO Health and Air France.
Diversification Opportunities for BEBO Health and Air France
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BEBO and Air is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and Air France KLM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air France KLM and BEBO Health 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 BEBO Health SA are associated (or correlated) with Air France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air France KLM has no effect on the direction of BEBO Health i.e., BEBO Health and Air France go up and down completely randomly.
Pair Corralation between BEBO Health and Air France
Assuming the 90 days trading horizon BEBO Health SA is expected to under-perform the Air France. But the stock apears to be less risky and, when comparing its historical volatility, BEBO Health SA is 1.21 times less risky than Air France. The stock trades about -0.08 of its potential returns per unit of risk. The Air France KLM SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,497 in Air France KLM SA on August 26, 2024 and sell it today you would lose (761.00) from holding Air France KLM SA or give up 50.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEBO Health SA vs. Air France KLM SA
Performance |
| Timeline |
| BEBO Health SA |
| Air France KLM |
BEBO Health and Air France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEBO Health and Air France
The main advantage of trading using opposite BEBO Health and Air France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEBO Health position performs unexpectedly, Air France 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 Air France will offset losses from the drop in Air France's long position.| BEBO Health vs. Groupe Partouche SA | BEBO Health vs. Gevelot | BEBO Health vs. Plastiques du Val | BEBO Health vs. Trilogiq |
| Air France vs. Manitou BF SA | Air France vs. Ossiam Minimum Variance | Air France vs. Granite 3x LVMH | Air France vs. 21Shares Polkadot ETP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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