Correlation Between BS Group and Corbion NV

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

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

Diversification Opportunities for BS Group and Corbion NV

0.85

Correlation Coefficient

BS Group  Corbion NV

Very poor diversification

The 3 months correlation between BSGR and Corbion is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BS Group SA and Corbion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corbion NV and BS Group 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 BS Group SA are associated (or correlated) with Corbion NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corbion NV has no effect on the direction of BS Group i.e., BS Group and Corbion NV go up and down completely randomly.

Pair Corralation between BS Group and Corbion NV

Assuming the 90 days trading horizon BS Group SA is expected to generate 1.14 times more return on investment than Corbion NV. However, BS Group is 1.14 times more volatile than Corbion NV. It trades about -0.07 of its potential returns per unit of risk. Corbion NV is currently generating about -0.08 per unit of risk. If you would invest  474.00  in BS Group SA on September 19, 2024 and sell it today you would lose (42.00) from holding BS Group SA or give up 8.86% of portfolio value over 90 days.

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

BS Group SA  vs.  Corbion NV

BS Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BS Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Corbion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corbion NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BS Group and Corbion NV

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

The idea behind BS Group SA and Corbion NV 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.