Correlation Between Guerbet S and Biomerieux

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

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

Diversification Opportunities for Guerbet S and Biomerieux

0.43

Correlation Coefficient

Guerbet S  Biomerieux

Very weak diversification

The 3 months correlation between Guerbet and Biomerieux is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Biomerieux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomerieux SA and Guerbet S 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 Guerbet S A are associated (or correlated) with Biomerieux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomerieux SA has no effect on the direction of Guerbet S i.e., Guerbet S and Biomerieux go up and down completely randomly.

Pair Corralation between Guerbet S and Biomerieux

Assuming the 90 days trading horizon Guerbet S is expected to generate 2.4 times less return on investment than Biomerieux. In addition to that, Guerbet S is 1.51 times more volatile than Biomerieux SA. It trades about 0.06 of its total potential returns per unit of risk. Biomerieux SA is currently generating about 0.23 per unit of volatility. If you would invest  9,750  in Biomerieux SA on December 1, 2024 and sell it today you would earn a total of  1,800  from holding Biomerieux SA or generate 18.46% return on investment over 90 days.

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

Guerbet S A  vs.  Biomerieux SA

Guerbet S A

Risk-Adjusted Performance

Modest

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

Biomerieux SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Biomerieux SA are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Biomerieux sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guerbet S and Biomerieux

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

The idea behind Guerbet S A and Biomerieux 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.