Correlation Between Bonduelle SCA and Vicat SA

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

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

Diversification Opportunities for Bonduelle SCA and Vicat SA

-0.09

Correlation Coefficient

Bonduelle SCA  Vicat SA

Good diversification

The 3 months correlation between Bonduelle and Vicat is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Vicat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicat SA and Bonduelle SCA 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 Bonduelle SCA are associated (or correlated) with Vicat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicat SA has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Vicat SA go up and down completely randomly.

Pair Corralation between Bonduelle SCA and Vicat SA

Assuming the 90 days trading horizon Bonduelle SCA is expected to under-perform the Vicat SA. In addition to that, Bonduelle SCA is 1.26 times more volatile than Vicat SA. It trades about -0.06 of its total potential returns per unit of risk. Vicat SA is currently generating about 0.09 per unit of volatility. If you would invest  1,990  in Vicat SA on September 3, 2024 and sell it today you would earn a total of  1,590  from holding Vicat SA or generate 79.9% return on investment over 90 days.

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

Bonduelle SCA  vs.  Vicat SA

Bonduelle SCA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vicat SA

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vicat SA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vicat SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bonduelle SCA and Vicat SA

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

The idea behind Bonduelle SCA and Vicat 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.