Correlation Between Bonduelle SCA and Mtropole Tlvision
Can any of the company-specific risk be diversified away by investing in both Bonduelle SCA and Mtropole Tlvision 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 Mtropole Tlvision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonduelle SCA and Mtropole Tlvision SA, you can compare the effects of market volatilities on Bonduelle SCA and Mtropole Tlvision 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 Mtropole Tlvision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonduelle SCA and Mtropole Tlvision.
Diversification Opportunities for Bonduelle SCA and Mtropole Tlvision
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bonduelle and Mtropole is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Mtropole Tlvision SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mtropole Tlvision 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 Mtropole Tlvision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mtropole Tlvision has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Mtropole Tlvision go up and down completely randomly.
Pair Corralation between Bonduelle SCA and Mtropole Tlvision
Assuming the 90 days trading horizon Bonduelle SCA is expected to generate 1.55 times more return on investment than Mtropole Tlvision. However, Bonduelle SCA is 1.55 times more volatile than Mtropole Tlvision SA. It trades about -0.05 of its potential returns per unit of risk. Mtropole Tlvision SA is currently generating about -0.18 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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bonduelle SCA vs. Mtropole Tlvision SA
Performance |
Timeline |
Bonduelle SCA |
Mtropole Tlvision |
Bonduelle SCA and Mtropole Tlvision Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bonduelle SCA and Mtropole Tlvision
The main advantage of trading using opposite Bonduelle SCA and Mtropole Tlvision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonduelle SCA position performs unexpectedly, Mtropole Tlvision 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 Mtropole Tlvision will offset losses from the drop in Mtropole Tlvision's long position.Bonduelle SCA vs. Socit BIC SA | Bonduelle SCA vs. Bnteau SA | Bonduelle SCA vs. Casino Guichard Perrachon | Bonduelle SCA vs. SEB SA |
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Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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