Correlation Between Veolia Environnement and Bilendi

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

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

Diversification Opportunities for Veolia Environnement and Bilendi

0.05

Correlation Coefficient

Veolia Environnement  Bilendi

Significant diversification

The 3 months correlation between Veolia and Bilendi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi and Veolia Environnement 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 Veolia Environnement VE 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 Veolia Environnement i.e., Veolia Environnement and Bilendi go up and down completely randomly.

Pair Corralation between Veolia Environnement and Bilendi

Assuming the 90 days trading horizon Veolia Environnement is expected to generate 6.36 times less return on investment than Bilendi. But when comparing it to its historical volatility, Veolia Environnement VE is 2.52 times less risky than Bilendi. It trades about 0.11 of its potential returns per unit of risk. Bilendi is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,315  in Bilendi on December 4, 2024 and sell it today you would earn a total of  715.00  from holding Bilendi or generate 54.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Veolia Environnement VE  vs.  Bilendi

Veolia Environnement

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Veolia Environnement VE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Veolia Environnement may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bilendi

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Veolia Environnement and Bilendi

The main advantage of trading using opposite Veolia Environnement and Bilendi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement 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 Veolia Environnement VE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.