Correlation Between Delfingen and Burelle SA

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

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

Diversification Opportunities for Delfingen and Burelle SA

0.67

Correlation Coefficient

Delfingen  Burelle SA

Poor diversification

The 3 months correlation between Delfingen and Burelle is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Delfingen and Burelle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burelle SA and Delfingen 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 Delfingen are associated (or correlated) with Burelle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burelle SA has no effect on the direction of Delfingen i.e., Delfingen and Burelle SA go up and down completely randomly.

Pair Corralation between Delfingen and Burelle SA

Assuming the 90 days trading horizon Delfingen is expected to under-perform the Burelle SA. In addition to that, Delfingen is 1.3 times more volatile than Burelle SA. It trades about -0.09 of its total potential returns per unit of risk. Burelle SA is currently generating about -0.03 per unit of volatility. If you would invest  45,421  in Burelle SA on October 10, 2024 and sell it today you would lose (13,121) from holding Burelle SA or give up 28.89% of portfolio value over 90 days.

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

Delfingen  vs.  Burelle SA

Delfingen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delfingen 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.

Burelle SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Burelle SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Delfingen and Burelle SA

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

The idea behind Delfingen and Burelle 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.