Correlation Between Voltalia and Glob Bioenergi

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

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

Diversification Opportunities for Voltalia and Glob Bioenergi

-0.09

Correlation Coefficient

Voltalia  Glob Bioenergi

Good diversification

The 3 months correlation between Voltalia and Glob is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Voltalia SA and Glob Bioenergi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glob Bioenergi and Voltalia 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 Voltalia SA are associated (or correlated) with Glob Bioenergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glob Bioenergi has no effect on the direction of Voltalia i.e., Voltalia and Glob Bioenergi go up and down completely randomly.

Pair Corralation between Voltalia and Glob Bioenergi

Assuming the 90 days trading horizon Voltalia SA is expected to generate 0.25 times more return on investment than Glob Bioenergi. However, Voltalia SA is 3.92 times less risky than Glob Bioenergi. It trades about 0.02 of its potential returns per unit of risk. Glob Bioenergi is currently generating about -0.03 per unit of risk. If you would invest  757.00  in Voltalia SA on September 3, 2024 and sell it today you would earn a total of  11.00  from holding Voltalia SA or generate 1.45% return on investment over 90 days.

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

Voltalia SA  vs.  Glob Bioenergi

Voltalia SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voltalia SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Voltalia is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Glob Bioenergi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glob Bioenergi has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Voltalia and Glob Bioenergi

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

The idea behind Voltalia SA and Glob Bioenergi 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.