Correlation Between Acheter Louer and Biomerieux

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

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

Diversification Opportunities for Acheter Louer and Biomerieux

0.83

Correlation Coefficient

Acheter Louer  Biomerieux

Very poor diversification

The 3 months correlation between Acheter and Biomerieux is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Acheter Louer and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux SA and Acheter Louer 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 Acheter Louer are associated (or correlated) with Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of Acheter Louer i.e., Acheter Louer and Biomerieux go up and down completely randomly.

Pair Corralation between Acheter Louer and Biomerieux

Assuming the 90 days trading horizon Acheter Louer is expected to generate 15.51 times more return on investment than Biomerieux. However, Acheter Louer is 15.51 times more volatile than Biomerieux SA. It trades about 0.04 of its potential returns per unit of risk. Biomerieux SA is currently generating about 0.03 per unit of risk. If you would invest  200.00  in Acheter Louer on August 31, 2024 and sell it today you would lose (148.00) from holding Acheter Louer or give up 74.0% of portfolio value over 90 days.

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

Acheter Louer  vs.  Biomerieux SA

Acheter Louer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acheter Louer has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Biomerieux SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomerieux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Biomerieux is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Acheter Louer and Biomerieux

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

The idea behind Acheter Louer and Biomerieux SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.