Correlation Between Mtropole Tlvision and Bonduelle SCA

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

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

Diversification Opportunities for Mtropole Tlvision and Bonduelle SCA

0.17

Correlation Coefficient

Mtropole Tlvision  Bonduelle SCA

Average diversification

The 3 months correlation between Mtropole and Bonduelle is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mtropole Tlvision SA and Bonduelle SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonduelle SCA and Mtropole Tlvision 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 Mtropole Tlvision SA are associated (or correlated) with Bonduelle SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonduelle SCA has no effect on the direction of Mtropole Tlvision i.e., Mtropole Tlvision and Bonduelle SCA go up and down completely randomly.

Pair Corralation between Mtropole Tlvision and Bonduelle SCA

Assuming the 90 days trading horizon Mtropole Tlvision SA is expected to generate 0.61 times more return on investment than Bonduelle SCA. However, Mtropole Tlvision SA is 1.64 times less risky than Bonduelle SCA. It trades about 0.2 of its potential returns per unit of risk. Bonduelle SCA is currently generating about 0.1 per unit of risk. If you would invest  1,208  in Mtropole Tlvision SA on November 19, 2024 and sell it today you would earn a total of  50.00  from holding Mtropole Tlvision SA or generate 4.14% return on investment over 90 days.

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

Mtropole Tlvision SA  vs.  Bonduelle SCA

Mtropole Tlvision

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mtropole Tlvision SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mtropole Tlvision sustained solid returns over the last few months and may actually be approaching a breakup point.

Bonduelle SCA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bonduelle SCA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bonduelle SCA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mtropole Tlvision and Bonduelle SCA

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

The idea behind Mtropole Tlvision SA and Bonduelle SCA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.