Correlation Between BBX Capital and Azimut Holding

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

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

Diversification Opportunities for BBX Capital and Azimut Holding

-0.21

Correlation Coefficient

BBX Capital  Azimut Holding

Very good diversification

The 3 months correlation between BBX and Azimut is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BBX Capital and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA and BBX Capital 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 BBX Capital are associated (or correlated) with Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of BBX Capital i.e., BBX Capital and Azimut Holding go up and down completely randomly.

Pair Corralation between BBX Capital and Azimut Holding

Assuming the 90 days horizon BBX Capital is expected to under-perform the Azimut Holding. But the otc stock apears to be less risky and, when comparing its historical volatility, BBX Capital is 1.99 times less risky than Azimut Holding. The otc stock trades about -0.11 of its potential returns per unit of risk. The Azimut Holding SpA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,392  in Azimut Holding SpA on December 28, 2024 and sell it today you would earn a total of  598.00  from holding Azimut Holding SpA or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

BBX Capital  vs.  Azimut Holding SpA

BBX Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BBX Capital 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 forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Azimut Holding SpA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azimut Holding SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Azimut Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BBX Capital and Azimut Holding

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

The idea behind BBX Capital and Azimut Holding SpA 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.