Correlation Between Manitou BF and Wendel
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Wendel 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 Wendel 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 Wendel, you can compare the effects of market volatilities on Manitou BF and Wendel 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 Wendel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Wendel.
Diversification Opportunities for Manitou BF and Wendel
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Manitou and Wendel is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Wendel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wendel 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 Wendel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wendel has no effect on the direction of Manitou BF i.e., Manitou BF and Wendel go up and down completely randomly.
Pair Corralation between Manitou BF and Wendel
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Wendel. In addition to that, Manitou BF is 1.66 times more volatile than Wendel. It trades about -0.04 of its total potential returns per unit of risk. Wendel is currently generating about 0.02 per unit of volatility. If you would invest 8,819 in Wendel on August 28, 2024 and sell it today you would earn a total of 606.00 from holding Wendel or generate 6.87% 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. Wendel
Performance |
| Timeline |
| Manitou BF SA |
| Wendel |
Manitou BF and Wendel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Wendel
The main advantage of trading using opposite Manitou BF and Wendel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Wendel 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 Wendel will offset losses from the drop in Wendel's long position.| Manitou BF vs. Publicis Groupe SA | Manitou BF vs. Pernod Ricard SA | Manitou BF vs. Compagnie Generale des | Manitou BF vs. Compagnie de Saint Gobain |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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