Correlation Between Bpost NV and Celyad SA

Can any of the company-specific risk be diversified away by investing in both Bpost NV and Celyad 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 Bpost NV and Celyad SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bpost NV and Celyad SA, you can compare the effects of market volatilities on Bpost NV and Celyad 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 Bpost NV with a short position of Celyad SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bpost NV and Celyad SA.

Diversification Opportunities for Bpost NV and Celyad SA

-0.87

Correlation Coefficient

Bpost NV  Celyad SA

Pay attention - limited upside

The 3 months correlation between Bpost and Celyad is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and Celyad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celyad SA and Bpost NV 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 Bpost NV are associated (or correlated) with Celyad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celyad SA has no effect on the direction of Bpost NV i.e., Bpost NV and Celyad SA go up and down completely randomly.

Pair Corralation between Bpost NV and Celyad SA

Assuming the 90 days trading horizon Bpost NV is expected to under-perform the Celyad SA. But the stock apears to be less risky and, when comparing its historical volatility, Bpost NV is 7.12 times less risky than Celyad SA. The stock trades about -0.18 of its potential returns per unit of risk. The Celyad SA is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Celyad SA on September 13, 2024 and sell it today you would earn a total of  48.00  from holding Celyad SA or generate 208.7% return on investment over 90 days.

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

Bpost NV  vs.  Celyad SA

Bpost NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bpost NV 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 fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Celyad SA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celyad SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Celyad SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bpost NV and Celyad SA

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

The idea behind Bpost NV and Celyad 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.