Correlation Between Manitou BF and Bnteau SA

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

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

Diversification Opportunities for Manitou BF and Bnteau SA

0.45

Correlation Coefficient

Manitou BF  Bnteau SA

Very weak diversification

The 3 months correlation between Manitou and Bnteau is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Bnteau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bnteau SA and Manitou BF 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 Manitou BF SA are associated (or correlated) with Bnteau SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bnteau SA has no effect on the direction of Manitou BF i.e., Manitou BF and Bnteau SA go up and down completely randomly.

Pair Corralation between Manitou BF and Bnteau SA

Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the Bnteau SA. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 1.74 times less risky than Bnteau SA. The stock trades about -0.13 of its potential returns per unit of risk. The Bnteau SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  870.00  in Bnteau SA on September 2, 2024 and sell it today you would lose (76.00) from holding Bnteau SA or give up 8.74% of portfolio value over 90 days.

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

Manitou BF SA  vs.  Bnteau SA

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Bnteau SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bnteau SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bnteau SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Manitou BF and Bnteau SA

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

The idea behind Manitou BF SA and Bnteau 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..