Correlation Between Balyo SA and Figeac Aero

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

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

Diversification Opportunities for Balyo SA and Figeac Aero

0.91

Correlation Coefficient

Balyo SA  Figeac Aero

Almost no diversification

The 3 months correlation between Balyo and Figeac is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Balyo SA and Figeac Aero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figeac Aero SA and Balyo SA 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 Balyo SA are associated (or correlated) with Figeac Aero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figeac Aero SA has no effect on the direction of Balyo SA i.e., Balyo SA and Figeac Aero go up and down completely randomly.

Pair Corralation between Balyo SA and Figeac Aero

Assuming the 90 days trading horizon Balyo SA is expected to generate 1.5 times less return on investment than Figeac Aero. In addition to that, Balyo SA is 1.51 times more volatile than Figeac Aero SA. It trades about 0.11 of its total potential returns per unit of risk. Figeac Aero SA is currently generating about 0.26 per unit of volatility. If you would invest  598.00  in Figeac Aero SA on December 30, 2024 and sell it today you would earn a total of  308.00  from holding Figeac Aero SA or generate 51.51% return on investment over 90 days.

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

Balyo SA  vs.  Figeac Aero SA

Balyo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Balyo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Balyo SA reported solid returns over the last few months and may actually be approaching a breakup point.

Figeac Aero SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Figeac Aero SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Figeac Aero sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Balyo SA and Figeac Aero

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

The idea behind Balyo SA and Figeac Aero 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.