Correlation Between Eurazeo and Burelle SA

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

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

Diversification Opportunities for Eurazeo and Burelle SA

0.44

Correlation Coefficient

Eurazeo  Burelle SA

Very weak diversification

The 3 months correlation between Eurazeo and Burelle is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Burelle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burelle SA and Eurazeo 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 Eurazeo are associated (or correlated) with Burelle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burelle SA has no effect on the direction of Eurazeo i.e., Eurazeo and Burelle SA go up and down completely randomly.

Pair Corralation between Eurazeo and Burelle SA

Assuming the 90 days horizon Eurazeo is expected to generate 0.6 times more return on investment than Burelle SA. However, Eurazeo is 1.66 times less risky than Burelle SA. It trades about 0.18 of its potential returns per unit of risk. Burelle SA is currently generating about 0.08 per unit of risk. If you would invest  6,955  in Eurazeo on November 29, 2024 and sell it today you would earn a total of  975.00  from holding Eurazeo or generate 14.02% return on investment over 90 days.

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

Eurazeo  vs.  Burelle SA

Eurazeo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eurazeo are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eurazeo sustained solid returns over the last few months and may actually be approaching a breakup point.

Burelle SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Burelle SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Burelle SA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Eurazeo and Burelle SA

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

The idea behind Eurazeo and Burelle 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..