Correlation Between Oeneo SA and Bilendi

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

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

Diversification Opportunities for Oeneo SA and Bilendi

0.24

Correlation Coefficient

Oeneo SA  Bilendi

Modest diversification

The 3 months correlation between Oeneo and Bilendi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oeneo SA and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi and Oeneo SA 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 Oeneo SA are associated (or correlated) with Bilendi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilendi has no effect on the direction of Oeneo SA i.e., Oeneo SA and Bilendi go up and down completely randomly.

Pair Corralation between Oeneo SA and Bilendi

Assuming the 90 days trading horizon Oeneo SA is expected to under-perform the Bilendi. But the stock apears to be less risky and, when comparing its historical volatility, Oeneo SA is 2.74 times less risky than Bilendi. The stock trades about 0.0 of its potential returns per unit of risk. The Bilendi is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,715  in Bilendi on October 15, 2024 and sell it today you would earn a total of  60.00  from holding Bilendi or generate 3.5% return on investment over 90 days.

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

Oeneo SA  vs.  Bilendi

Oeneo SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bilendi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Bilendi is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Oeneo SA and Bilendi

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

The idea behind Oeneo SA and Bilendi 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.