Correlation Between Broadpeak and Courtois

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

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

Diversification Opportunities for Broadpeak and Courtois

0.58

Correlation Coefficient

Broadpeak  Courtois

Very weak diversification

The 3 months correlation between Broadpeak and Courtois is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Broadpeak SA and Courtois SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Courtois SA and Broadpeak 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 Broadpeak SA are associated (or correlated) with Courtois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Courtois SA has no effect on the direction of Broadpeak i.e., Broadpeak and Courtois go up and down completely randomly.

Pair Corralation between Broadpeak and Courtois

Assuming the 90 days trading horizon Broadpeak SA is expected to under-perform the Courtois. In addition to that, Broadpeak is 1.36 times more volatile than Courtois SA. It trades about -0.07 of its total potential returns per unit of risk. Courtois SA is currently generating about -0.05 per unit of volatility. If you would invest  13,000  in Courtois SA on October 25, 2024 and sell it today you would lose (900.00) from holding Courtois SA or give up 6.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Broadpeak SA  vs.  Courtois SA

Broadpeak SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadpeak SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Courtois SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Broadpeak and Courtois

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

The idea behind Broadpeak SA and Courtois 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.