Correlation Between BEBO Health and Covivio Hotels
Can any of the company-specific risk be diversified away by investing in both BEBO Health and Covivio Hotels 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 Covivio Hotels 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 Covivio Hotels, you can compare the effects of market volatilities on BEBO Health and Covivio Hotels 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 Covivio Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEBO Health and Covivio Hotels.
Diversification Opportunities for BEBO Health and Covivio Hotels
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BEBO and Covivio is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and Covivio Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio Hotels 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 Covivio Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio Hotels has no effect on the direction of BEBO Health i.e., BEBO Health and Covivio Hotels go up and down completely randomly.
Pair Corralation between BEBO Health and Covivio Hotels
Assuming the 90 days trading horizon BEBO Health SA is expected to under-perform the Covivio Hotels. In addition to that, BEBO Health is 2.58 times more volatile than Covivio Hotels. It trades about -0.07 of its total potential returns per unit of risk. Covivio Hotels is currently generating about 0.07 per unit of volatility. If you would invest 1,326 in Covivio Hotels on August 26, 2024 and sell it today you would earn a total of 524.00 from holding Covivio Hotels or generate 39.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.08% |
| Values | Daily Returns |
BEBO Health SA vs. Covivio Hotels
Performance |
| Timeline |
| BEBO Health SA |
| Covivio Hotels |
BEBO Health and Covivio Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BEBO Health and Covivio Hotels
The main advantage of trading using opposite BEBO Health and Covivio Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEBO Health position performs unexpectedly, Covivio Hotels 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 Covivio Hotels will offset losses from the drop in Covivio Hotels' long position.| BEBO Health vs. Groupe Partouche SA | BEBO Health vs. Gevelot | BEBO Health vs. Plastiques du Val | BEBO Health vs. Trilogiq |
| Covivio Hotels vs. Fonciere Lyonnaise | Covivio Hotels vs. Fonciere Inea | Covivio Hotels vs. Immobiliere Dassault SA | Covivio Hotels vs. Frey SA |
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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