Correlation Between Virbac SA and Bonduelle SCA
Can any of the company-specific risk be diversified away by investing in both Virbac SA and Bonduelle SCA 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 Virbac SA and Bonduelle SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virbac SA and Bonduelle SCA, you can compare the effects of market volatilities on Virbac SA and Bonduelle SCA 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 Virbac SA with a short position of Bonduelle SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virbac SA and Bonduelle SCA.
Diversification Opportunities for Virbac SA and Bonduelle SCA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virbac and Bonduelle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Virbac SA and Bonduelle SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonduelle SCA and Virbac 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 Virbac SA are associated (or correlated) with Bonduelle SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonduelle SCA has no effect on the direction of Virbac SA i.e., Virbac SA and Bonduelle SCA go up and down completely randomly.
Pair Corralation between Virbac SA and Bonduelle SCA
Assuming the 90 days trading horizon Virbac SA is expected to under-perform the Bonduelle SCA. In addition to that, Virbac SA is 1.6 times more volatile than Bonduelle SCA. It trades about -0.34 of its total potential returns per unit of risk. Bonduelle SCA is currently generating about -0.23 per unit of volatility. If you would invest 682.00 in Bonduelle SCA on August 28, 2024 and sell it today you would lose (27.00) from holding Bonduelle SCA or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virbac SA vs. Bonduelle SCA
Performance |
| Timeline |
| Virbac SA |
| Bonduelle SCA |
Virbac SA and Bonduelle SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virbac SA and Bonduelle SCA
The main advantage of trading using opposite Virbac SA and Bonduelle SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virbac SA position performs unexpectedly, Bonduelle SCA 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 Bonduelle SCA will offset losses from the drop in Bonduelle SCA's long position.| Virbac SA vs. Vetoquinol | Virbac SA vs. Trigano SA | Virbac SA vs. Biomerieux SA | Virbac SA vs. Sartorius Stedim Biotech |
| Bonduelle SCA vs. Socit BIC SA | Bonduelle SCA vs. Bnteau SA | Bonduelle SCA vs. Casino Guichard Perrachon | Bonduelle SCA vs. SEB 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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