Correlation Between Marie Brizard and Linedata Services

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

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

Diversification Opportunities for Marie Brizard and Linedata Services

-0.4

Correlation Coefficient

Marie Brizard  Linedata Services

Very good diversification

The 3 months correlation between Marie and Linedata is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services and Marie Brizard 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 Marie Brizard Wine are associated (or correlated) with Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Marie Brizard i.e., Marie Brizard and Linedata Services go up and down completely randomly.

Pair Corralation between Marie Brizard and Linedata Services

Assuming the 90 days trading horizon Marie Brizard is expected to generate 13.69 times less return on investment than Linedata Services. But when comparing it to its historical volatility, Marie Brizard Wine is 1.01 times less risky than Linedata Services. It trades about 0.01 of its potential returns per unit of risk. Linedata Services SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  7,000  in Linedata Services SA on August 31, 2024 and sell it today you would earn a total of  1,000.00  from holding Linedata Services SA or generate 14.29% return on investment over 90 days.

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

Marie Brizard Wine  vs.  Linedata Services SA

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Weak

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

Linedata Services

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Linedata Services SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Linedata Services sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marie Brizard and Linedata Services

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

The idea behind Marie Brizard Wine and Linedata Services 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.