Correlation Between Chargeurs and BEBO Health

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

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

Diversification Opportunities for Chargeurs and BEBO Health

0.56

Correlation Coefficient

Chargeurs  BEBO Health

Very weak diversification

The 3 months correlation between Chargeurs and BEBO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA and Chargeurs 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 Chargeurs SA are associated (or correlated) with BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of Chargeurs i.e., Chargeurs and BEBO Health go up and down completely randomly.

Pair Corralation between Chargeurs and BEBO Health

Assuming the 90 days trading horizon Chargeurs SA is expected to generate 0.88 times more return on investment than BEBO Health. However, Chargeurs SA is 1.14 times less risky than BEBO Health. It trades about -0.11 of its potential returns per unit of risk. BEBO Health SA is currently generating about -0.12 per unit of risk. If you would invest  1,198  in Chargeurs SA on September 13, 2024 and sell it today you would lose (164.00) from holding Chargeurs SA or give up 13.69% of portfolio value over 90 days.

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

Chargeurs SA  vs.  BEBO Health SA

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chargeurs 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BEBO Health SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BEBO Health SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Chargeurs and BEBO Health

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

The idea behind Chargeurs SA and BEBO Health 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.