Correlation Between Manitou BF and Fonciere Inea

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

Diversification Opportunities for Manitou BF and Fonciere Inea

0.43

Correlation Coefficient

Manitou BF  Fonciere Inea

Very weak diversification

The 3 months correlation between Manitou and Fonciere is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Fonciere Inea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonciere Inea 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 Fonciere Inea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonciere Inea has no effect on the direction of Manitou BF i.e., Manitou BF and Fonciere Inea go up and down completely randomly.

Pair Corralation between Manitou BF and Fonciere Inea

Assuming the 90 days trading horizon Manitou BF SA is expected to generate 1.61 times more return on investment than Fonciere Inea. However, Manitou BF is 1.61 times more volatile than Fonciere Inea. It trades about 0.39 of its potential returns per unit of risk. Fonciere Inea is currently generating about 0.34 per unit of risk. If you would invest  1,618  in Manitou BF SA on October 22, 2024 and sell it today you would earn a total of  268.00  from holding Manitou BF SA or generate 16.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Manitou BF SA  vs.  Fonciere Inea

Manitou BF SA

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manitou BF SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Manitou BF sustained solid returns over the last few months and may actually be approaching a breakup point.

Fonciere Inea

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fonciere Inea are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fonciere Inea may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Manitou BF and Fonciere Inea

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

The idea behind Manitou BF SA and Fonciere Inea 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.