Correlation Between Yellow Pages and BELIMO Holding

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

By analyzing existing cross correlation between Yellow Pages Limited and BELIMO Holding AG, you can compare the effects of market volatilities on Yellow Pages and BELIMO Holding 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 Yellow Pages with a short position of BELIMO Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yellow Pages and BELIMO Holding.

Diversification Opportunities for Yellow Pages and BELIMO Holding

-0.69

Correlation Coefficient

Yellow Pages  BELIMO Holding

Excellent diversification

The 3 months correlation between Yellow and BELIMO is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Yellow Pages Limited and BELIMO Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BELIMO Holding AG and Yellow Pages 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 Yellow Pages Limited are associated (or correlated) with BELIMO Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BELIMO Holding AG has no effect on the direction of Yellow Pages i.e., Yellow Pages and BELIMO Holding go up and down completely randomly.

Pair Corralation between Yellow Pages and BELIMO Holding

Assuming the 90 days horizon Yellow Pages is expected to generate 13.38 times less return on investment than BELIMO Holding. In addition to that, Yellow Pages is 2.33 times more volatile than BELIMO Holding AG. It trades about 0.0 of its total potential returns per unit of risk. BELIMO Holding AG is currently generating about 0.07 per unit of volatility. If you would invest  47,326  in BELIMO Holding AG on October 3, 2024 and sell it today you would earn a total of  20,546  from holding BELIMO Holding AG or generate 43.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	89.38%
Values	Daily Returns

Yellow Pages Limited  vs.  BELIMO Holding AG

Yellow Pages Limited

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yellow Pages Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, Yellow Pages may actually be approaching a critical reversion point that can send shares even higher in February 2025.

BELIMO Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BELIMO Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BELIMO Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Yellow Pages and BELIMO Holding

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

The idea behind Yellow Pages Limited and BELIMO Holding AG 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.