Correlation Between Barbara Bui and Mastrad

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

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

Diversification Opportunities for Barbara Bui and Mastrad

-0.7

Correlation Coefficient

Barbara Bui  Mastrad

Excellent diversification

The 3 months correlation between Barbara and Mastrad is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Barbara Bui SA and Mastrad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastrad and Barbara Bui 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 Barbara Bui SA are associated (or correlated) with Mastrad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastrad has no effect on the direction of Barbara Bui i.e., Barbara Bui and Mastrad go up and down completely randomly.

Pair Corralation between Barbara Bui and Mastrad

Assuming the 90 days trading horizon Barbara Bui SA is expected to under-perform the Mastrad. But the stock apears to be less risky and, when comparing its historical volatility, Barbara Bui SA is 4.17 times less risky than Mastrad. The stock trades about -0.17 of its potential returns per unit of risk. The Mastrad is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.80  in Mastrad on December 23, 2024 and sell it today you would earn a total of  1.66  from holding Mastrad or generate 207.5% return on investment over 90 days.

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

Barbara Bui SA  vs.  Mastrad

Barbara Bui SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barbara Bui SA 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 forward indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Mastrad

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastrad are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mastrad reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barbara Bui and Mastrad

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

The idea behind Barbara Bui SA and Mastrad 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.