Correlation Between Manitou BF and Guerbet S

Can any of the company-specific risk be diversified away by investing in both Manitou BF and Guerbet S 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 Guerbet S 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 Guerbet S A, you can compare the effects of market volatilities on Manitou BF and Guerbet S 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 Guerbet S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Guerbet S.

Diversification Opportunities for Manitou BF and Guerbet S

0.49

Correlation Coefficient

Manitou BF  Guerbet S

Very weak diversification

The 3 months correlation between Manitou and Guerbet is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Guerbet S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guerbet S A 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 Guerbet S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guerbet S A has no effect on the direction of Manitou BF i.e., Manitou BF and Guerbet S go up and down completely randomly.

Pair Corralation between Manitou BF and Guerbet S

Assuming the 90 days trading horizon Manitou BF is expected to generate 1.07 times less return on investment than Guerbet S. In addition to that, Manitou BF is 1.13 times more volatile than Guerbet S A. It trades about 0.2 of its total potential returns per unit of risk. Guerbet S A is currently generating about 0.24 per unit of volatility. If you would invest  2,535  in Guerbet S A on October 7, 2024 and sell it today you would earn a total of  200.00  from holding Guerbet S A or generate 7.89% return on investment over 90 days.

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

Manitou BF SA  vs.  Guerbet S A

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 somewhat strong basic indicators, Manitou BF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guerbet S A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerbet S A 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Manitou BF and Guerbet S

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

The idea behind Manitou BF SA and Guerbet S A 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 Transaction History module to view history of all your transactions and understand their impact on performance.