Correlation Between Bastide Le and Clasquin

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

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

Diversification Opportunities for Bastide Le and Clasquin

-0.69

Correlation Coefficient

Bastide Le  Clasquin

Excellent diversification

The 3 months correlation between Bastide and Clasquin is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bastide Le Confort and Clasquin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clasquin and Bastide Le 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 Bastide Le Confort are associated (or correlated) with Clasquin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clasquin has no effect on the direction of Bastide Le i.e., Bastide Le and Clasquin go up and down completely randomly.

Pair Corralation between Bastide Le and Clasquin

Assuming the 90 days trading horizon Bastide Le Confort is expected to under-perform the Clasquin. In addition to that, Bastide Le is 8.76 times more volatile than Clasquin. It trades about -0.02 of its total potential returns per unit of risk. Clasquin is currently generating about 0.14 per unit of volatility. If you would invest  13,850  in Clasquin on September 3, 2024 and sell it today you would earn a total of  315.00  from holding Clasquin or generate 2.27% return on investment over 90 days.

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

Bastide Le Confort  vs.  Clasquin

Bastide Le Confort

Risk-Adjusted Performance

0 of 100

Very Weak

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

Clasquin

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clasquin are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Clasquin is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bastide Le and Clasquin

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

The idea behind Bastide Le Confort and Clasquin 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.