Correlation Between Biomerieux and Guerbet S

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

By analyzing existing cross correlation between Biomerieux SA and Guerbet S A, you can compare the effects of market volatilities on Biomerieux and Guerbet S 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 Guerbet S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomerieux and Guerbet S.

Diversification Opportunities for Biomerieux and Guerbet S

0.45

Correlation Coefficient

Biomerieux  Guerbet S

Very weak diversification

The 3 months correlation between Biomerieux and Guerbet is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Biomerieux SA and Guerbet S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerbet S A 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 Guerbet S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerbet S A has no effect on the direction of Biomerieux i.e., Biomerieux and Guerbet S go up and down completely randomly.

Pair Corralation between Biomerieux and Guerbet S

Assuming the 90 days trading horizon Biomerieux SA is expected to generate 0.66 times more return on investment than Guerbet S. However, Biomerieux SA is 1.51 times less risky than Guerbet S. It trades about 0.23 of its potential returns per unit of risk. Guerbet S A is currently generating about 0.06 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	Weak
Accuracy	100.0%
Values	Daily Returns

Biomerieux SA  vs.  Guerbet S A

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.

Guerbet S A

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guerbet S A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Guerbet S may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Biomerieux and Guerbet S

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

The idea behind Biomerieux SA and Guerbet S A 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.