Correlation Between Bonduelle SCA and Imerys SA

Can any of the company-specific risk be diversified away by investing in both Bonduelle SCA and Imerys 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 Imerys 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 Imerys SA, you can compare the effects of market volatilities on Bonduelle SCA and Imerys 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 Imerys SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonduelle SCA and Imerys SA.

Diversification Opportunities for Bonduelle SCA and Imerys SA

0.88

Correlation Coefficient

Bonduelle SCA  Imerys SA

Very poor diversification

The 3 months correlation between Bonduelle and Imerys is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Imerys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imerys 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 Imerys SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imerys SA has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Imerys SA go up and down completely randomly.

Pair Corralation between Bonduelle SCA and Imerys SA

Assuming the 90 days trading horizon Bonduelle SCA is expected to generate 0.87 times more return on investment than Imerys SA. However, Bonduelle SCA is 1.15 times less risky than Imerys SA. It trades about 0.15 of its potential returns per unit of risk. Imerys SA is currently generating about 0.08 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	Strong
Accuracy	100.0%
Values	Daily Returns

Bonduelle SCA  vs.  Imerys 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.

Imerys SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Imerys SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Imerys SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bonduelle SCA and Imerys SA

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

The idea behind Bonduelle SCA and Imerys 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.