Correlation Between BEBO Health and SA Catana

Can any of the company-specific risk be diversified away by investing in both BEBO Health and SA Catana 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 SA Catana 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 SA Catana Group, you can compare the effects of market volatilities on BEBO Health and SA Catana 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 SA Catana. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEBO Health and SA Catana.

Diversification Opportunities for BEBO Health and SA Catana

0.57

Correlation Coefficient

BEBO Health  SA Catana

Very weak diversification

The 3 months correlation between BEBO and CATG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BEBO Health SA and SA Catana Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Catana Group 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 SA Catana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Catana Group has no effect on the direction of BEBO Health i.e., BEBO Health and SA Catana go up and down completely randomly.

Pair Corralation between BEBO Health and SA Catana

Assuming the 90 days trading horizon BEBO Health SA is expected to under-perform the SA Catana. In addition to that, BEBO Health is 1.14 times more volatile than SA Catana Group. It trades about -0.12 of its total potential returns per unit of risk. SA Catana Group is currently generating about -0.08 per unit of volatility. If you would invest  516.00  in SA Catana Group on September 3, 2024 and sell it today you would lose (54.00) from holding SA Catana Group or give up 10.47% of portfolio value over 90 days.

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

BEBO Health SA  vs.  SA Catana Group

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.

SA Catana Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SA Catana Group 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.

Pair Trading with BEBO Health and SA Catana

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

The idea behind BEBO Health SA and SA Catana Group 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.