Correlation Between Piscines Desjoyaux and Bnteau SA

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

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

Diversification Opportunities for Piscines Desjoyaux and Bnteau SA

0.13

Correlation Coefficient

Piscines Desjoyaux  Bnteau SA

Average diversification

The 3 months correlation between Piscines and Bnteau is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Piscines Desjoyaux SA and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Piscines Desjoyaux 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 Piscines Desjoyaux SA are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Piscines Desjoyaux i.e., Piscines Desjoyaux and Bnteau SA go up and down completely randomly.

Pair Corralation between Piscines Desjoyaux and Bnteau SA

Assuming the 90 days trading horizon Piscines Desjoyaux SA is expected to generate 0.3 times more return on investment than Bnteau SA. However, Piscines Desjoyaux SA is 3.29 times less risky than Bnteau SA. It trades about -0.03 of its potential returns per unit of risk. Bnteau SA is currently generating about -0.01 per unit of risk. If you would invest  1,250  in Piscines Desjoyaux SA on September 3, 2024 and sell it today you would lose (30.00) from holding Piscines Desjoyaux SA or give up 2.4% of portfolio value over 90 days.

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

Piscines Desjoyaux SA  vs.  Bnteau SA

Piscines Desjoyaux

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Piscines Desjoyaux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Piscines Desjoyaux is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Bnteau SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Piscines Desjoyaux and Bnteau SA

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

The idea behind Piscines Desjoyaux SA and Bnteau 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.