Correlation Between Bonduelle SCA and Ipsos SA

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Can any of the company-specific risk be diversified away by investing in both Bonduelle SCA and Ipsos SA 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 Ipsos SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonduelle SCA and Ipsos SA, you can compare the effects of market volatilities on Bonduelle SCA and Ipsos SA 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 Ipsos SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonduelle SCA and Ipsos SA.

Diversification Opportunities for Bonduelle SCA and Ipsos SA

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Bonduelle and Ipsos is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Ipsos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsos 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 Ipsos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsos SA has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Ipsos SA go up and down completely randomly.

Pair Corralation between Bonduelle SCA and Ipsos SA

Assuming the 90 days trading horizon Bonduelle SCA is expected to generate 0.88 times more return on investment than Ipsos SA. However, Bonduelle SCA is 1.13 times less risky than Ipsos SA. It trades about -0.05 of its potential returns per unit of risk. Ipsos SA is currently generating about -0.17 per unit of risk. If you would invest  670.00  in Bonduelle SCA on August 30, 2024 and sell it today you would lose (44.00) from holding Bonduelle SCA or give up 6.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bonduelle SCA  vs.  Ipsos SA

 Performance 
       Timeline  
Bonduelle SCA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bonduelle SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bonduelle SCA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ipsos SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ipsos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bonduelle SCA and Ipsos SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bonduelle SCA and Ipsos SA

The main advantage of trading using opposite Bonduelle SCA and Ipsos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonduelle SCA position performs unexpectedly, Ipsos SA 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 Ipsos SA will offset losses from the drop in Ipsos SA's long position.
The idea behind Bonduelle SCA and Ipsos 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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