Correlation Between Basic Fit and Aperam SA

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

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

Diversification Opportunities for Basic Fit and Aperam SA

0.52

Correlation Coefficient

Basic Fit  Aperam SA

Very weak diversification

The 3 months correlation between Basic and Aperam is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Basic Fit NV and Aperam SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperam SA and Basic Fit 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 Basic Fit NV are associated (or correlated) with Aperam SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperam SA has no effect on the direction of Basic Fit i.e., Basic Fit and Aperam SA go up and down completely randomly.

Pair Corralation between Basic Fit and Aperam SA

Assuming the 90 days trading horizon Basic Fit NV is expected to generate 1.46 times more return on investment than Aperam SA. However, Basic Fit is 1.46 times more volatile than Aperam SA. It trades about 0.13 of its potential returns per unit of risk. Aperam SA is currently generating about 0.0 per unit of risk. If you would invest  2,046  in Basic Fit NV on May 10, 2025 and sell it today you would earn a total of  426.00  from holding Basic Fit NV or generate 20.82% return on investment over 90 days.

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

Basic Fit NV  vs.  Aperam SA

Basic Fit NV

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Basic Fit NV are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Basic Fit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Aperam SA

Risk-Adjusted Performance

Weak

Over the last 90 days Aperam SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aperam SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Basic Fit and Aperam SA

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

The idea behind Basic Fit NV and Aperam 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.