Correlation Between Marie Brizard and FNP Technologies

Can any of the company-specific risk be diversified away by investing in both Marie Brizard and FNP Technologies 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 FNP Technologies 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 FNP Technologies SA, you can compare the effects of market volatilities on Marie Brizard and FNP Technologies 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 FNP Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marie Brizard and FNP Technologies.

Diversification Opportunities for Marie Brizard and FNP Technologies

0.04

Correlation Coefficient

Marie Brizard  FNP Technologies

Significant diversification

The 3 months correlation between Marie and FNP is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Marie Brizard Wine and FNP Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNP Technologies 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 FNP Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNP Technologies has no effect on the direction of Marie Brizard i.e., Marie Brizard and FNP Technologies go up and down completely randomly.

Pair Corralation between Marie Brizard and FNP Technologies

Assuming the 90 days trading horizon Marie Brizard Wine is expected to generate 0.26 times more return on investment than FNP Technologies. However, Marie Brizard Wine is 3.87 times less risky than FNP Technologies. It trades about 0.08 of its potential returns per unit of risk. FNP Technologies SA is currently generating about -0.03 per unit of risk. If you would invest  224.00  in Marie Brizard Wine on September 13, 2024 and sell it today you would earn a total of  163.00  from holding Marie Brizard Wine or generate 72.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.06%
Values	Daily Returns

Marie Brizard Wine  vs.  FNP Technologies SA

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very 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.

FNP Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FNP Technologies 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 Marie Brizard and FNP Technologies

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

The idea behind Marie Brizard Wine and FNP Technologies 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.