Correlation Between Balyo SA and Prodways Group

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

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

Diversification Opportunities for Balyo SA and Prodways Group

0.58

Correlation Coefficient

Balyo SA  Prodways Group

Very weak diversification

The 3 months correlation between Balyo and Prodways is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Balyo SA and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA 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 Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of Balyo SA i.e., Balyo SA and Prodways Group go up and down completely randomly.

Pair Corralation between Balyo SA and Prodways Group

Assuming the 90 days trading horizon Balyo SA is expected to under-perform the Prodways Group. In addition to that, Balyo SA is 1.86 times more volatile than Prodways Group SA. It trades about -0.19 of its total potential returns per unit of risk. Prodways Group SA is currently generating about -0.09 per unit of volatility. If you would invest  51.00  in Prodways Group SA on September 4, 2024 and sell it today you would lose (7.00) from holding Prodways Group SA or give up 13.73% of portfolio value over 90 days.

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

Balyo SA  vs.  Prodways Group SA

Balyo SA

Risk-Adjusted Performance

0 of 100

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.

Prodways Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodways Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Balyo SA and Prodways Group

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

The idea behind Balyo SA and Prodways Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.