Correlation Between Becle SA and Marubeni

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

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

Diversification Opportunities for Becle SA and Marubeni

0.29

Correlation Coefficient

Becle SA  Marubeni

Modest diversification

The 3 months correlation between Becle and Marubeni is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Becle SA de and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni and Becle 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 Becle SA de are associated (or correlated) with Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of Becle SA i.e., Becle SA and Marubeni go up and down completely randomly.

Pair Corralation between Becle SA and Marubeni

Assuming the 90 days horizon Becle SA de is expected to under-perform the Marubeni. But the pink sheet apears to be less risky and, when comparing its historical volatility, Becle SA de is 1.36 times less risky than Marubeni. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Marubeni is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,527  in Marubeni on September 4, 2024 and sell it today you would earn a total of  61.00  from holding Marubeni or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Becle SA de  vs.  Marubeni

Becle SA de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Becle SA de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Marubeni

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marubeni are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Marubeni may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Becle SA and Marubeni

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

The idea behind Becle SA de and Marubeni 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.