Correlation Between DBV Technologies and Balyo SA

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

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

Diversification Opportunities for DBV Technologies and Balyo SA

0.56

Correlation Coefficient

DBV Technologies  Balyo SA

Very weak diversification

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

Pair Corralation between DBV Technologies and Balyo SA

Assuming the 90 days trading horizon DBV Technologies SA is expected to under-perform the Balyo SA. But the stock apears to be less risky and, when comparing its historical volatility, DBV Technologies SA is 1.02 times less risky than Balyo SA. The stock trades about -0.05 of its potential returns per unit of risk. The Balyo SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Balyo SA on September 4, 2024 and sell it today you would lose (7.00) from holding Balyo SA or give up 20.0% of portfolio value over 90 days.

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

DBV Technologies SA  vs.  Balyo SA

DBV Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Balyo SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balyo 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 DBV Technologies and Balyo SA

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

The idea behind DBV Technologies SA and Balyo 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.