Correlation Between Adocia and Bastide Le

Can any of the company-specific risk be diversified away by investing in both Adocia and Bastide Le 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 Adocia and Bastide Le into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adocia and Bastide Le Confort, you can compare the effects of market volatilities on Adocia and Bastide Le 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 Adocia with a short position of Bastide Le. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adocia and Bastide Le.

Diversification Opportunities for Adocia and Bastide Le

-0.64

Correlation Coefficient

Adocia  Bastide Le

Excellent diversification

The 3 months correlation between Adocia and Bastide is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Adocia and Bastide Le Confort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bastide Le Confort and Adocia 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 Adocia are associated (or correlated) with Bastide Le. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bastide Le Confort has no effect on the direction of Adocia i.e., Adocia and Bastide Le go up and down completely randomly.

Pair Corralation between Adocia and Bastide Le

Assuming the 90 days trading horizon Adocia is expected to under-perform the Bastide Le. In addition to that, Adocia is 1.7 times more volatile than Bastide Le Confort. It trades about -0.1 of its total potential returns per unit of risk. Bastide Le Confort is currently generating about 0.19 per unit of volatility. If you would invest  2,100  in Bastide Le Confort on December 1, 2024 and sell it today you would earn a total of  550.00  from holding Bastide Le Confort or generate 26.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Adocia  vs.  Bastide Le Confort

Adocia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adocia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bastide Le Confort

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bastide Le Confort are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bastide Le sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adocia and Bastide Le

The main advantage of trading using opposite Adocia and Bastide Le positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adocia position performs unexpectedly, Bastide Le 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 Bastide Le will offset losses from the drop in Bastide Le's long position.

The idea behind Adocia and Bastide Le Confort 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.