Correlation Between Verallia and Bains Mer
Can any of the company-specific risk be diversified away by investing in both Verallia and Bains Mer 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 Verallia and Bains Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verallia and Bains Mer Monaco, you can compare the effects of market volatilities on Verallia and Bains Mer 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 Verallia with a short position of Bains Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verallia and Bains Mer.
Diversification Opportunities for Verallia and Bains Mer
Very weak diversification
The 3 months correlation between Verallia and Bains is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Verallia and Bains Mer Monaco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bains Mer Monaco and Verallia 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 Verallia are associated (or correlated) with Bains Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bains Mer Monaco has no effect on the direction of Verallia i.e., Verallia and Bains Mer go up and down completely randomly.
Pair Corralation between Verallia and Bains Mer
Assuming the 90 days trading horizon Verallia is expected to under-perform the Bains Mer. In addition to that, Verallia is 1.06 times more volatile than Bains Mer Monaco. It trades about -0.28 of its total potential returns per unit of risk. Bains Mer Monaco is currently generating about -0.09 per unit of volatility. If you would invest 10,350 in Bains Mer Monaco on September 21, 2024 and sell it today you would lose (350.00) from holding Bains Mer Monaco or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verallia vs. Bains Mer Monaco
Performance |
| Timeline |
| Verallia |
| Bains Mer Monaco |
Verallia and Bains Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verallia and Bains Mer
The main advantage of trading using opposite Verallia and Bains Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verallia position performs unexpectedly, Bains Mer 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 Bains Mer will offset losses from the drop in Bains Mer's long position.The idea behind Verallia and Bains Mer Monaco pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bains Mer vs. Compagnie des Alpes | Bains Mer vs. Groupe Partouche SA | Bains Mer vs. Bnteau SA | Bains Mer vs. Boiron 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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