Correlation Between Bastide Le and Chargeurs

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

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

Diversification Opportunities for Bastide Le and Chargeurs

0.43

Correlation Coefficient

Bastide Le  Chargeurs

Very weak diversification

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

Pair Corralation between Bastide Le and Chargeurs

Assuming the 90 days trading horizon Bastide Le Confort is expected to generate 1.2 times more return on investment than Chargeurs. However, Bastide Le is 1.2 times more volatile than Chargeurs SA. It trades about 0.05 of its potential returns per unit of risk. Chargeurs SA is currently generating about -0.09 per unit of risk. If you would invest  2,055  in Bastide Le Confort on September 12, 2024 and sell it today you would earn a total of  120.00  from holding Bastide Le Confort or generate 5.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Bastide Le Confort  vs.  Chargeurs SA

Bastide Le Confort

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bastide Le Confort are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bastide Le may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chargeurs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward 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 Bastide Le and Chargeurs

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

The idea behind Bastide Le Confort and Chargeurs 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.