Correlation Between Cloudberry Clean and Bonheur

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

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

Diversification Opportunities for Cloudberry Clean and Bonheur

0.27

Correlation Coefficient

Cloudberry Clean  Bonheur

Modest diversification

The 3 months correlation between Cloudberry and Bonheur is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cloudberry Clean Energy and Bonheur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonheur and Cloudberry Clean 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 Cloudberry Clean Energy are associated (or correlated) with Bonheur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonheur has no effect on the direction of Cloudberry Clean i.e., Cloudberry Clean and Bonheur go up and down completely randomly.

Pair Corralation between Cloudberry Clean and Bonheur

Assuming the 90 days trading horizon Cloudberry Clean Energy is expected to under-perform the Bonheur. In addition to that, Cloudberry Clean is 1.49 times more volatile than Bonheur. It trades about -0.11 of its total potential returns per unit of risk. Bonheur is currently generating about 0.02 per unit of volatility. If you would invest  27,100  in Bonheur on September 2, 2024 and sell it today you would earn a total of  450.00  from holding Bonheur or generate 1.66% return on investment over 90 days.

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

Cloudberry Clean Energy  vs.  Bonheur

Cloudberry Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cloudberry Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Bonheur

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bonheur are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Bonheur is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cloudberry Clean and Bonheur

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

The idea behind Cloudberry Clean Energy and Bonheur 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.