Correlation Between EFG International and Bellevue Group

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

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

Diversification Opportunities for EFG International and Bellevue Group

-0.71

Correlation Coefficient

EFG International  Bellevue Group

Pay attention - limited upside

The 3 months correlation between EFG and Bellevue is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding EFG International AG and Bellevue Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Group AG and EFG International 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 EFG International AG are associated (or correlated) with Bellevue Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Group AG has no effect on the direction of EFG International i.e., EFG International and Bellevue Group go up and down completely randomly.

Pair Corralation between EFG International and Bellevue Group

Assuming the 90 days trading horizon EFG International AG is expected to generate 0.78 times more return on investment than Bellevue Group. However, EFG International AG is 1.28 times less risky than Bellevue Group. It trades about 0.08 of its potential returns per unit of risk. Bellevue Group AG is currently generating about -0.36 per unit of risk. If you would invest  1,146  in EFG International AG on September 17, 2024 and sell it today you would earn a total of  62.00  from holding EFG International AG or generate 5.41% return on investment over 90 days.

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

EFG International AG  vs.  Bellevue Group AG

EFG International

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EFG International AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, EFG International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Bellevue Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellevue Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with EFG International and Bellevue Group

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

The idea behind EFG International AG and Bellevue Group AG 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.