Correlation Between Balyo SA and Claranova

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

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

Diversification Opportunities for Balyo SA and Claranova

0.39

Correlation Coefficient

Balyo SA  Claranova

Weak diversification

The 3 months correlation between Balyo and Claranova is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Balyo SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Balyo SA 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 Balyo SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Balyo SA i.e., Balyo SA and Claranova go up and down completely randomly.

Pair Corralation between Balyo SA and Claranova

Assuming the 90 days trading horizon Balyo SA is expected to under-perform the Claranova. In addition to that, Balyo SA is 1.41 times more volatile than Claranova SE. It trades about -0.09 of its total potential returns per unit of risk. Claranova SE is currently generating about -0.09 per unit of volatility. If you would invest  217.00  in Claranova SE on September 3, 2024 and sell it today you would lose (70.00) from holding Claranova SE or give up 32.26% of portfolio value over 90 days.

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

Balyo SA  vs.  Claranova SE

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.

Claranova SE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Balyo SA and Claranova

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

The idea behind Balyo SA and Claranova SE 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.