Correlation Between Cnova NV and Believe SAS

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Can any of the company-specific risk be diversified away by investing in both Cnova NV and Believe SAS 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 Cnova NV and Believe SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cnova NV and Believe SAS, you can compare the effects of market volatilities on Cnova NV and Believe SAS 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 Cnova NV with a short position of Believe SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cnova NV and Believe SAS.

Diversification Opportunities for Cnova NV and Believe SAS

CnovaBelieveDiversified AwayCnovaBelieveDiversified Away100%
0.22
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Cnova NV and Believe SAS

Assuming the 90 days trading horizon Cnova NV is expected to generate 12.98 times more return on investment than Believe SAS. However, Cnova NV is 12.98 times more volatile than Believe SAS. It trades about 0.04 of its potential returns per unit of risk. Believe SAS is currently generating about -0.06 per unit of risk. If you would invest  35.00  in Cnova NV on October 25, 2024 and sell it today you would lose (24.00) from holding Cnova NV or give up 68.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cnova NV  vs.  Believe SAS

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50050100150200
JavaScript chart by amCharts 3.21.15CNV BLV
       Timeline  
Cnova NV 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Cnova NV are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cnova NV sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.100000000000000120.20.40.60.811.2
Believe SAS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Believe SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1313.51414.515

Cnova NV and Believe SAS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-72.64-54.4-36.17-17.93-0.1117.6336.1954.7573.3191.87 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15CNV BLV
       Returns  

Pair Trading with Cnova NV and Believe SAS

The main advantage of trading using opposite Cnova NV and Believe SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cnova NV position performs unexpectedly, Believe SAS 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 Believe SAS will offset losses from the drop in Believe SAS's long position.
The idea behind Cnova NV and Believe SAS 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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