Correlation Between Figeac Aero and Balyo SA

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

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

Diversification Opportunities for Figeac Aero and Balyo SA

0.91

Correlation Coefficient

Figeac Aero  Balyo SA

Almost no diversification

The 3 months correlation between Figeac and Balyo is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Figeac Aero SA and Balyo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balyo SA and Figeac Aero 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 Figeac Aero SA are associated (or correlated) with Balyo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balyo SA has no effect on the direction of Figeac Aero i.e., Figeac Aero and Balyo SA go up and down completely randomly.

Pair Corralation between Figeac Aero and Balyo SA

Assuming the 90 days trading horizon Figeac Aero SA is expected to generate 0.66 times more return on investment than Balyo SA. However, Figeac Aero SA is 1.51 times less risky than Balyo SA. It trades about 0.26 of its potential returns per unit of risk. Balyo SA is currently generating about 0.11 per unit of risk. If you would invest  598.00  in Figeac Aero SA on December 30, 2024 and sell it today you would earn a total of  308.00  from holding Figeac Aero SA or generate 51.51% return on investment over 90 days.

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

Figeac Aero SA  vs.  Balyo SA

Figeac Aero SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Figeac Aero SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Figeac Aero sustained solid returns over the last few months and may actually be approaching a breakup point.

Balyo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Balyo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Balyo SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Figeac Aero and Balyo SA

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

The idea behind Figeac Aero SA and Balyo 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.