Correlation Between Bollore SA and Media 6

Can any of the company-specific risk be diversified away by investing in both Bollore SA and Media 6 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 Bollore SA and Media 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bollore SA and Media 6 SA, you can compare the effects of market volatilities on Bollore SA and Media 6 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 Bollore SA with a short position of Media 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bollore SA and Media 6.

Diversification Opportunities for Bollore SA and Media 6

-0.51

Correlation Coefficient

Bollore SA  Media 6

Excellent diversification

The 3 months correlation between Bollore and Media is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bollore SA and Media 6 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media 6 SA and Bollore 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 Bollore SA are associated (or correlated) with Media 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media 6 SA has no effect on the direction of Bollore SA i.e., Bollore SA and Media 6 go up and down completely randomly.

Pair Corralation between Bollore SA and Media 6

Assuming the 90 days trading horizon Bollore SA is expected to generate 3.53 times less return on investment than Media 6. But when comparing it to its historical volatility, Bollore SA is 4.24 times less risky than Media 6. It trades about 0.05 of its potential returns per unit of risk. Media 6 SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Media 6 SA on September 12, 2024 and sell it today you would earn a total of  60.00  from holding Media 6 SA or generate 5.77% return on investment over 90 days.

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

Bollore SA  vs.  Media 6 SA

Bollore SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bollore SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Bollore SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Media 6 SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Media 6 SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Media 6 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bollore SA and Media 6

The main advantage of trading using opposite Bollore SA and Media 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bollore SA position performs unexpectedly, Media 6 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 Media 6 will offset losses from the drop in Media 6's long position.

The idea behind Bollore SA and Media 6 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.