Correlation Between Roche Bobois and Vente Unique

Can any of the company-specific risk be diversified away by investing in both Roche Bobois and Vente Unique 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 Roche Bobois and Vente Unique into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Roche Bobois and Vente Unique

0.32

Correlation Coefficient

Roche Bobois  Vente Unique

Weak diversification

The 3 months correlation between Roche and Vente is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Roche Bobois and Vente Unique in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vente Unique and Roche Bobois 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 Roche Bobois are associated (or correlated) with Vente Unique. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vente Unique has no effect on the direction of Roche Bobois i.e., Roche Bobois and Vente Unique go up and down completely randomly.

Pair Corralation between Roche Bobois and Vente Unique

Assuming the 90 days trading horizon Roche Bobois is expected to under-perform the Vente Unique. But the stock apears to be less risky and, when comparing its historical volatility, Roche Bobois is 1.29 times less risky than Vente Unique. The stock trades about -0.19 of its potential returns per unit of risk. The Vente Unique is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,280  in Vente Unique on September 12, 2024 and sell it today you would earn a total of  25.00  from holding Vente Unique or generate 1.95% return on investment over 90 days.

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

Roche Bobois  vs.  Vente Unique

Roche Bobois

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roche Bobois has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Vente Unique

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vente Unique are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Vente Unique is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Roche Bobois and Vente Unique

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

The idea behind Roche Bobois and Vente Unique 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..