Correlation Between Chargeurs and BIO UV

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

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

Diversification Opportunities for Chargeurs and BIO UV

0.56

Correlation Coefficient

Chargeurs  BIO UV

Very weak diversification

The 3 months correlation between Chargeurs and BIO is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and BIO UV Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO UV Group and Chargeurs 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 Chargeurs SA are associated (or correlated) with BIO UV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO UV Group has no effect on the direction of Chargeurs i.e., Chargeurs and BIO UV go up and down completely randomly.

Pair Corralation between Chargeurs and BIO UV

Assuming the 90 days trading horizon Chargeurs is expected to generate 16.44 times less return on investment than BIO UV. But when comparing it to its historical volatility, Chargeurs SA is 2.19 times less risky than BIO UV. It trades about 0.05 of its potential returns per unit of risk. BIO UV Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  160.00  in BIO UV Group on September 28, 2024 and sell it today you would earn a total of  53.00  from holding BIO UV Group or generate 33.13% return on investment over 90 days.

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

Chargeurs SA  vs.  BIO UV Group

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.

BIO UV Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BIO UV Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, BIO UV may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Chargeurs and BIO UV

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

The idea behind Chargeurs SA and BIO UV Group 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.