Correlation Between Bilendi and Foncire 7

Can any of the company-specific risk be diversified away by investing in both Bilendi and Foncire 7 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 Bilendi and Foncire 7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bilendi and Foncire 7 investissement, you can compare the effects of market volatilities on Bilendi and Foncire 7 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 Bilendi with a short position of Foncire 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilendi and Foncire 7.

Diversification Opportunities for Bilendi and Foncire 7

0.34

Correlation Coefficient

Bilendi  Foncire 7

Weak diversification

The 3 months correlation between Bilendi and Foncire is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bilendi and Foncire 7 investissement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foncire 7 investissement and Bilendi 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 Bilendi are associated (or correlated) with Foncire 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foncire 7 investissement has no effect on the direction of Bilendi i.e., Bilendi and Foncire 7 go up and down completely randomly.

Pair Corralation between Bilendi and Foncire 7

Assuming the 90 days trading horizon Bilendi is expected to generate 1.16 times more return on investment than Foncire 7. However, Bilendi is 1.16 times more volatile than Foncire 7 investissement. It trades about 0.19 of its potential returns per unit of risk. Foncire 7 investissement is currently generating about -0.16 per unit of risk. If you would invest  1,500  in Bilendi on October 9, 2024 and sell it today you would earn a total of  370.00  from holding Bilendi or generate 24.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

Bilendi  vs.  Foncire 7 investissement

Bilendi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi reported solid returns over the last few months and may actually be approaching a breakup point.

Foncire 7 investissement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Foncire 7 investissement 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bilendi and Foncire 7

The main advantage of trading using opposite Bilendi and Foncire 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilendi position performs unexpectedly, Foncire 7 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 Foncire 7 will offset losses from the drop in Foncire 7's long position.

The idea behind Bilendi and Foncire 7 investissement 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.