Correlation Between Bonduelle SCA and JC Decaux

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

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

Diversification Opportunities for Bonduelle SCA and JC Decaux

0.44

Correlation Coefficient

Bonduelle SCA  JC Decaux

Very weak diversification

The 3 months correlation between Bonduelle and DEC is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and JC Decaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Decaux 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 JC Decaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Decaux SA has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and JC Decaux go up and down completely randomly.

Pair Corralation between Bonduelle SCA and JC Decaux

Assuming the 90 days trading horizon Bonduelle SCA is expected to generate 1.03 times more return on investment than JC Decaux. However, Bonduelle SCA is 1.03 times more volatile than JC Decaux SA. It trades about 0.15 of its potential returns per unit of risk. JC Decaux SA is currently generating about 0.04 per unit of risk. If you would invest  621.00  in Bonduelle SCA on December 30, 2024 and sell it today you would earn a total of  153.00  from holding Bonduelle SCA or generate 24.64% return on investment over 90 days.

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

Bonduelle SCA  vs.  JC Decaux 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.

JC Decaux SA

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Bonduelle SCA and JC Decaux

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

The idea behind Bonduelle SCA and JC Decaux 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.