Correlation Between Chargeurs and Bains Mer

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Can any of the company-specific risk be diversified away by investing in both Chargeurs and Bains Mer 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 Bains Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chargeurs SA and Bains Mer Monaco, you can compare the effects of market volatilities on Chargeurs and Bains Mer 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 Bains Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chargeurs and Bains Mer.

Diversification Opportunities for Chargeurs and Bains Mer

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Chargeurs and Bains is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and Bains Mer Monaco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bains Mer Monaco 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 Bains Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bains Mer Monaco has no effect on the direction of Chargeurs i.e., Chargeurs and Bains Mer go up and down completely randomly.

Pair Corralation between Chargeurs and Bains Mer

Assuming the 90 days trading horizon Chargeurs SA is expected to generate 1.32 times more return on investment than Bains Mer. However, Chargeurs is 1.32 times more volatile than Bains Mer Monaco. It trades about 0.05 of its potential returns per unit of risk. Bains Mer Monaco is currently generating about -0.06 per unit of risk. If you would invest  995.00  in Chargeurs SA on September 28, 2024 and sell it today you would earn a total of  15.00  from holding Chargeurs SA or generate 1.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Chargeurs SA  vs.  Bains Mer Monaco

 Performance 
       Timeline  
Chargeurs SA 

Risk-Adjusted Performance

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Weak
 
Strong
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.
Bains Mer Monaco 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bains Mer Monaco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Chargeurs and Bains Mer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chargeurs and Bains Mer

The main advantage of trading using opposite Chargeurs and Bains Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs position performs unexpectedly, Bains Mer 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 Bains Mer will offset losses from the drop in Bains Mer's long position.
The idea behind Chargeurs SA and Bains Mer Monaco 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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