Correlation Between Neotion SA and Manitou BF

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

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

Diversification Opportunities for Neotion SA and Manitou BF

-0.43

Correlation Coefficient

Neotion SA  Manitou BF

Very good diversification

The 3 months correlation between Neotion and Manitou is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Neotion SA and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA and Neotion 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 Neotion SA are associated (or correlated) with Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Neotion SA i.e., Neotion SA and Manitou BF go up and down completely randomly.

Pair Corralation between Neotion SA and Manitou BF

If you would invest  50.00  in Neotion SA on September 26, 2024 and sell it today you would earn a total of  0.00  from holding Neotion SA or generate 0.0% return on investment over 90 days.

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

Neotion SA  vs.  Manitou BF SA

Neotion SA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neotion SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Neotion SA reported solid returns over the last few months and may actually be approaching a breakup point.

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Neotion SA and Manitou BF

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

The idea behind Neotion SA and Manitou BF SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.