Correlation Between Coface SA and Bilendi

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

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

Diversification Opportunities for Coface SA and Bilendi

0.53

Correlation Coefficient

Coface SA  Bilendi

Very weak diversification

The 3 months correlation between Coface and Bilendi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Coface SA and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi and Coface SA 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 Coface SA are associated (or correlated) with Bilendi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilendi has no effect on the direction of Coface SA i.e., Coface SA and Bilendi go up and down completely randomly.

Pair Corralation between Coface SA and Bilendi

Assuming the 90 days trading horizon Coface SA is expected to generate 0.45 times more return on investment than Bilendi. However, Coface SA is 2.23 times less risky than Bilendi. It trades about 0.39 of its potential returns per unit of risk. Bilendi is currently generating about 0.07 per unit of risk. If you would invest  1,420  in Coface SA on December 25, 2024 and sell it today you would earn a total of  361.00  from holding Coface SA or generate 25.42% return on investment over 90 days.

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

Coface SA  vs.  Bilendi

Coface SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Coface SA are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Coface SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Bilendi

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Coface SA and Bilendi

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

The idea behind Coface SA and Bilendi 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.