Correlation Between Manitou BF and Aramis SAS
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Aramis SAS 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 Manitou BF and Aramis SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Aramis SAS, you can compare the effects of market volatilities on Manitou BF and Aramis SAS 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 Manitou BF with a short position of Aramis SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Aramis SAS.
Diversification Opportunities for Manitou BF and Aramis SAS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manitou and Aramis is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Aramis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramis SAS and Manitou BF 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 Manitou BF SA are associated (or correlated) with Aramis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramis SAS has no effect on the direction of Manitou BF i.e., Manitou BF and Aramis SAS go up and down completely randomly.
Pair Corralation between Manitou BF and Aramis SAS
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Aramis SAS. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 1.12 times less risky than Aramis SAS. The stock trades about -0.13 of its potential returns per unit of risk. The Aramis SAS is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Aramis SAS on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Aramis SAS or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Aramis SAS
Performance |
| Timeline |
| Manitou BF SA |
| Aramis SAS |
Manitou BF and Aramis SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Aramis SAS
The main advantage of trading using opposite Manitou BF and Aramis SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Aramis SAS 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 Aramis SAS will offset losses from the drop in Aramis SAS's long position.| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
| Aramis SAS vs. Believe SAS | Aramis SAS vs. OVH Groupe SAS | Aramis SAS vs. Derichebourg | Aramis SAS vs. Solutions 30 SE |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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