Correlation Between Biomerieux and Bonduelle SCA

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

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

Diversification Opportunities for Biomerieux and Bonduelle SCA

0.36

Correlation Coefficient

Biomerieux  Bonduelle SCA

Weak diversification

The 3 months correlation between Biomerieux and Bonduelle is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Biomerieux SA and Bonduelle SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonduelle SCA and Biomerieux 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 Biomerieux SA are associated (or correlated) with Bonduelle SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonduelle SCA has no effect on the direction of Biomerieux i.e., Biomerieux and Bonduelle SCA go up and down completely randomly.

Pair Corralation between Biomerieux and Bonduelle SCA

Assuming the 90 days trading horizon Biomerieux SA is expected to generate 0.71 times more return on investment than Bonduelle SCA. However, Biomerieux SA is 1.4 times less risky than Bonduelle SCA. It trades about 0.23 of its potential returns per unit of risk. Bonduelle SCA is currently generating about 0.15 per unit of risk. If you would invest  9,750  in Biomerieux SA on December 1, 2024 and sell it today you would earn a total of  1,800  from holding Biomerieux SA or generate 18.46% return on investment over 90 days.

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

Biomerieux SA  vs.  Bonduelle SCA

Biomerieux SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerieux SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Biomerieux sustained solid returns over the last few months and may actually be approaching a breakup point.

Bonduelle SCA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bonduelle SCA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bonduelle SCA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Biomerieux and Bonduelle SCA

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

The idea behind Biomerieux SA and Bonduelle SCA 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.