Correlation Between Marie Brizard and ISPD Network

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

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

Diversification Opportunities for Marie Brizard and ISPD Network

0.5

Correlation Coefficient

Marie Brizard  ISPD Network

Very weak diversification

The 3 months correlation between Marie and ISPD is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and ISPD Network SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISPD Network SA and Marie Brizard 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 Marie Brizard Wine are associated (or correlated) with ISPD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISPD Network SA has no effect on the direction of Marie Brizard i.e., Marie Brizard and ISPD Network go up and down completely randomly.

Pair Corralation between Marie Brizard and ISPD Network

Assuming the 90 days trading horizon Marie Brizard Wine is expected to generate 0.58 times more return on investment than ISPD Network. However, Marie Brizard Wine is 1.72 times less risky than ISPD Network. It trades about -0.09 of its potential returns per unit of risk. ISPD Network SA is currently generating about -0.13 per unit of risk. If you would invest  387.00  in Marie Brizard Wine on October 26, 2024 and sell it today you would lose (27.00) from holding Marie Brizard Wine or give up 6.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Marie Brizard Wine  vs.  ISPD Network SA

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine 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.

ISPD Network SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISPD Network 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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Marie Brizard and ISPD Network

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

The idea behind Marie Brizard Wine and ISPD Network 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.