Correlation Between Fresh Grapes and Becle SA

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

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

Diversification Opportunities for Fresh Grapes and Becle SA

0.26

Correlation Coefficient

Fresh Grapes  Becle SA

Modest diversification

The 3 months correlation between Fresh and Becle is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Becle SA de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Becle SA de and Fresh Grapes 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 Fresh Grapes LLC are associated (or correlated) with Becle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Becle SA de has no effect on the direction of Fresh Grapes i.e., Fresh Grapes and Becle SA go up and down completely randomly.

Pair Corralation between Fresh Grapes and Becle SA

Given the investment horizon of 90 days Fresh Grapes LLC is expected to generate 2.64 times more return on investment than Becle SA. However, Fresh Grapes is 2.64 times more volatile than Becle SA de. It trades about 0.07 of its potential returns per unit of risk. Becle SA de is currently generating about -0.09 per unit of risk. If you would invest  46.00  in Fresh Grapes LLC on September 23, 2024 and sell it today you would earn a total of  17.00  from holding Fresh Grapes LLC or generate 36.96% return on investment over 90 days.

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

Fresh Grapes LLC  vs.  Becle SA de

Fresh Grapes LLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Grapes LLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Fresh Grapes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Becle SA de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becle SA de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Fresh Grapes and Becle SA

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

The idea behind Fresh Grapes LLC and Becle SA de 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.