Correlation Between Bonduelle SCA and Poulaillon

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

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

Diversification Opportunities for Bonduelle SCA and Poulaillon

-0.08

Correlation Coefficient

Bonduelle SCA  Poulaillon

Good diversification

The 3 months correlation between Bonduelle and Poulaillon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Poulaillon SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poulaillon SA and Bonduelle SCA 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 Bonduelle SCA are associated (or correlated) with Poulaillon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poulaillon SA has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Poulaillon go up and down completely randomly.

Pair Corralation between Bonduelle SCA and Poulaillon

Assuming the 90 days trading horizon Bonduelle SCA is expected to generate 1.03 times more return on investment than Poulaillon. However, Bonduelle SCA is 1.03 times more volatile than Poulaillon SA. It trades about 0.15 of its potential returns per unit of risk. Poulaillon SA is currently generating about -0.03 per unit of risk. If you would invest  595.00  in Bonduelle SCA on December 2, 2024 and sell it today you would earn a total of  94.00  from holding Bonduelle SCA or generate 15.8% return on investment over 90 days.

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

Bonduelle SCA  vs.  Poulaillon SA

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.

Poulaillon SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Poulaillon SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Poulaillon is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bonduelle SCA and Poulaillon

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

The idea behind Bonduelle SCA and Poulaillon 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.