Correlation Between Balyo SA and Enertime SAS

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

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

Diversification Opportunities for Balyo SA and Enertime SAS

0.0

Correlation Coefficient

Balyo SA  Enertime SAS

Pay attention - limited upside

The 3 months correlation between Balyo and Enertime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Balyo SA and Enertime SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enertime SAS and Balyo 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 Balyo SA are associated (or correlated) with Enertime SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enertime SAS has no effect on the direction of Balyo SA i.e., Balyo SA and Enertime SAS go up and down completely randomly.

Pair Corralation between Balyo SA and Enertime SAS

Assuming the 90 days trading horizon Balyo SA is expected to generate 0.46 times more return on investment than Enertime SAS. However, Balyo SA is 2.18 times less risky than Enertime SAS. It trades about -0.07 of its potential returns per unit of risk. Enertime SAS is currently generating about -0.04 per unit of risk. If you would invest  73.00  in Balyo SA on September 26, 2024 and sell it today you would lose (44.00) from holding Balyo SA or give up 60.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.04%
Values	Daily Returns

Balyo SA  vs.  Enertime SAS

Balyo SA

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Balyo SA 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.

Enertime SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enertime SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Enertime SAS is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Balyo SA and Enertime SAS

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

The idea behind Balyo SA and Enertime SAS 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.