Correlation Between Bourse Direct and Keyrus SA

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

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

Diversification Opportunities for Bourse Direct and Keyrus SA

-0.22

Correlation Coefficient

Bourse Direct  Keyrus SA

Very good diversification

The 3 months correlation between Bourse and Keyrus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bourse Direct SA and Keyrus SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyrus SA and Bourse Direct 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 Bourse Direct SA are associated (or correlated) with Keyrus SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyrus SA has no effect on the direction of Bourse Direct i.e., Bourse Direct and Keyrus SA go up and down completely randomly.

Pair Corralation between Bourse Direct and Keyrus SA

Assuming the 90 days trading horizon Bourse Direct SA is expected to generate 1.09 times more return on investment than Keyrus SA. However, Bourse Direct is 1.09 times more volatile than Keyrus SA. It trades about 0.07 of its potential returns per unit of risk. Keyrus SA is currently generating about -0.05 per unit of risk. If you would invest  435.00  in Bourse Direct SA on December 30, 2024 and sell it today you would earn a total of  20.00  from holding Bourse Direct SA or generate 4.6% return on investment over 90 days.

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

Bourse Direct SA  vs.  Keyrus SA

Bourse Direct SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bourse Direct SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Bourse Direct is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Keyrus SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyrus SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Keyrus SA is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bourse Direct and Keyrus SA

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

The idea behind Bourse Direct SA and Keyrus 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.