Correlation Between BEBO Health and Innelec Multimedia

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

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

Diversification Opportunities for BEBO Health and Innelec Multimedia

0.29

Correlation Coefficient

BEBO Health  Innelec Multimedia

Modest diversification

The 3 months correlation between BEBO and Innelec is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and Innelec Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innelec Multimedia and BEBO Health 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 BEBO Health SA are associated (or correlated) with Innelec Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innelec Multimedia has no effect on the direction of BEBO Health i.e., BEBO Health and Innelec Multimedia go up and down completely randomly.

Pair Corralation between BEBO Health and Innelec Multimedia

If you would invest  297.00  in Innelec Multimedia on September 25, 2024 and sell it today you would earn a total of  41.00  from holding Innelec Multimedia or generate 13.8% return on investment over 90 days.

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

BEBO Health SA  vs.  Innelec Multimedia

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 relatively invariable basic indicators, BEBO Health is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Innelec Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innelec Multimedia has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with BEBO Health and Innelec Multimedia

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

The idea behind BEBO Health SA and Innelec Multimedia 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.