Correlation Between Bonduelle SCA and Mtropole Tlvision

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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 Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bonduelle SCA  vs.  Mtropole Tlvision 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.
Mtropole Tlvision 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mtropole Tlvision SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.
The idea behind Bonduelle SCA and Mtropole Tlvision 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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