Correlation Between Imerys SA and Bnteau SA
Can any of the company-specific risk be diversified away by investing in both Imerys SA and Bnteau SA 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 Imerys SA and Bnteau SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imerys SA and Bnteau SA, you can compare the effects of market volatilities on Imerys SA and Bnteau SA 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 Imerys SA with a short position of Bnteau SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imerys SA and Bnteau SA.
Diversification Opportunities for Imerys SA and Bnteau SA
Very weak diversification
The 3 months correlation between Imerys and Bnteau is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Imerys SA and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Imerys SA 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 Imerys SA are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Imerys SA i.e., Imerys SA and Bnteau SA go up and down completely randomly.
Pair Corralation between Imerys SA and Bnteau SA
Assuming the 90 days horizon Imerys SA is expected to generate 0.86 times more return on investment than Bnteau SA. However, Imerys SA is 1.16 times less risky than Bnteau SA. It trades about 0.03 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.01 per unit of risk. If you would invest 2,407 in Imerys SA on October 25, 2024 and sell it today you would earn a total of 333.00 from holding Imerys SA or generate 13.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imerys SA vs. Bnteau SA
Performance |
| Timeline |
| Imerys SA |
| Bnteau SA |
Imerys SA and Bnteau SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imerys SA and Bnteau SA
The main advantage of trading using opposite Imerys SA and Bnteau SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imerys SA position performs unexpectedly, Bnteau SA 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 Bnteau SA will offset losses from the drop in Bnteau SA's long position.| Imerys SA vs. Rubis SCA | Imerys SA vs. Eramet SA | Imerys SA vs. Nexity | Imerys SA vs. Compagnie de Saint Gobain |
| Bnteau SA vs. Trigano SA | Bnteau SA vs. Bonduelle SCA | Bnteau SA vs. Socit BIC SA | Bnteau SA vs. Imerys 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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