Correlation Between Barbara Bui and Centrale DAchat

Can any of the company-specific risk be diversified away by investing in both Barbara Bui and Centrale DAchat 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 Centrale DAchat 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 Centrale dAchat Franaise, you can compare the effects of market volatilities on Barbara Bui and Centrale DAchat 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 Centrale DAchat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barbara Bui and Centrale DAchat.

Diversification Opportunities for Barbara Bui and Centrale DAchat

0.06

Correlation Coefficient

Barbara Bui  Centrale DAchat

Significant diversification

The 3 months correlation between Barbara and Centrale is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Barbara Bui SA and Centrale dAchat Franaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrale dAchat Franaise 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 Centrale DAchat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrale dAchat Franaise has no effect on the direction of Barbara Bui i.e., Barbara Bui and Centrale DAchat go up and down completely randomly.

Pair Corralation between Barbara Bui and Centrale DAchat

Assuming the 90 days trading horizon Barbara Bui SA is expected to under-perform the Centrale DAchat. In addition to that, Barbara Bui is 4.25 times more volatile than Centrale dAchat Franaise. It trades about -0.17 of its total potential returns per unit of risk. Centrale dAchat Franaise is currently generating about 0.04 per unit of volatility. If you would invest  782.00  in Centrale dAchat Franaise on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Centrale dAchat Franaise or generate 2.81% return on investment over 90 days.

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

Barbara Bui SA  vs.  Centrale dAchat Franaise

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.

Centrale dAchat Franaise

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Centrale dAchat Franaise are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Centrale DAchat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Barbara Bui and Centrale DAchat

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

The idea behind Barbara Bui SA and Centrale dAchat Franaise 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.