Correlation Between CMG Cleantech and BEBO Health
Can any of the company-specific risk be diversified away by investing in both CMG Cleantech and BEBO Health 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 CMG Cleantech and BEBO Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CMG Cleantech SA and BEBO Health SA, you can compare the effects of market volatilities on CMG Cleantech and BEBO Health 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 CMG Cleantech with a short position of BEBO Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and BEBO Health.
Diversification Opportunities for CMG Cleantech and BEBO Health
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CMG and BEBO is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA and CMG Cleantech 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 CMG Cleantech SA are associated (or correlated) with BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and BEBO Health go up and down completely randomly.
Pair Corralation between CMG Cleantech and BEBO Health
Assuming the 90 days trading horizon CMG Cleantech SA is expected to generate 2.09 times more return on investment than BEBO Health. However, CMG Cleantech is 2.09 times more volatile than BEBO Health SA. It trades about -0.01 of its potential returns per unit of risk. BEBO Health SA is currently generating about -0.07 per unit of risk. If you would invest 410.00 in CMG Cleantech SA on August 29, 2024 and sell it today you would lose (288.00) from holding CMG Cleantech SA or give up 70.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
CMG Cleantech SA vs. BEBO Health SA
Performance |
| Timeline |
| CMG Cleantech SA |
| BEBO Health SA |
CMG Cleantech and BEBO Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CMG Cleantech and BEBO Health
The main advantage of trading using opposite CMG Cleantech and BEBO Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CMG Cleantech position performs unexpectedly, BEBO Health 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 BEBO Health will offset losses from the drop in BEBO Health's long position.| CMG Cleantech vs. EPC Groupe | CMG Cleantech vs. Groupe Sfpi | CMG Cleantech vs. NSE SA | CMG Cleantech vs. Manitou BF 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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