Correlation Between Bnteau SA and Thermador Groupe

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

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

Diversification Opportunities for Bnteau SA and Thermador Groupe

0.05

Correlation Coefficient

Bnteau SA  Thermador Groupe

Significant diversification

The 3 months correlation between Bnteau and Thermador is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bnteau SA and Thermador Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermador Groupe and Bnteau 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 Bnteau SA are associated (or correlated) with Thermador Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermador Groupe has no effect on the direction of Bnteau SA i.e., Bnteau SA and Thermador Groupe go up and down completely randomly.

Pair Corralation between Bnteau SA and Thermador Groupe

Assuming the 90 days trading horizon Bnteau SA is expected to generate 2.34 times more return on investment than Thermador Groupe. However, Bnteau SA is 2.34 times more volatile than Thermador Groupe SA. It trades about -0.01 of its potential returns per unit of risk. Thermador Groupe SA is currently generating about -0.11 per unit of risk. If you would invest  850.00  in Bnteau SA on September 3, 2024 and sell it today you would lose (56.00) from holding Bnteau SA or give up 6.59% of portfolio value over 90 days.

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

Bnteau SA  vs.  Thermador Groupe SA

Bnteau SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bnteau SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bnteau SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thermador Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermador Groupe 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 Bnteau SA and Thermador Groupe

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

The idea behind Bnteau SA and Thermador Groupe 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.