Correlation Between Burelle SA and Agripower France

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

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

Diversification Opportunities for Burelle SA and Agripower France

0.81

Correlation Coefficient

Burelle SA  Agripower France

Very poor diversification

The 3 months correlation between Burelle and Agripower is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Burelle SA and Agripower France Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripower France and Burelle 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 Burelle SA are associated (or correlated) with Agripower France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripower France has no effect on the direction of Burelle SA i.e., Burelle SA and Agripower France go up and down completely randomly.

Pair Corralation between Burelle SA and Agripower France

Assuming the 90 days trading horizon Burelle SA is expected to generate 0.69 times more return on investment than Agripower France. However, Burelle SA is 1.44 times less risky than Agripower France. It trades about -0.03 of its potential returns per unit of risk. Agripower France Sa is currently generating about -0.11 per unit of risk. If you would invest  34,000  in Burelle SA on September 14, 2024 and sell it today you would lose (1,400) from holding Burelle SA or give up 4.12% of portfolio value over 90 days.

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

Burelle SA  vs.  Agripower France Sa

Burelle SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Agripower France

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agripower France Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Burelle SA and Agripower France

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

The idea behind Burelle SA and Agripower France 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.