Correlation Between Boussard and HAL Trust

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

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

Diversification Opportunities for Boussard and HAL Trust

-0.69

Correlation Coefficient

Boussard  HAL Trust

Excellent diversification

The 3 months correlation between Boussard and HAL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Boussard and Gavaudan and HAL Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAL Trust and Boussard 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 Boussard and Gavaudan are associated (or correlated) with HAL Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAL Trust has no effect on the direction of Boussard i.e., Boussard and HAL Trust go up and down completely randomly.

Pair Corralation between Boussard and HAL Trust

Assuming the 90 days trading horizon Boussard and Gavaudan is expected to generate 0.91 times more return on investment than HAL Trust. However, Boussard and Gavaudan is 1.1 times less risky than HAL Trust. It trades about 0.1 of its potential returns per unit of risk. HAL Trust is currently generating about -0.05 per unit of risk. If you would invest  2,720  in Boussard and Gavaudan on August 24, 2024 and sell it today you would earn a total of  60.00  from holding Boussard and Gavaudan or generate 2.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	50.0%
Values	Daily Returns

Boussard and Gavaudan  vs.  HAL Trust

Boussard and Gavaudan

Risk-Adjusted Performance

0 of 100

OK

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

HAL Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Boussard and HAL Trust

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

The idea behind Boussard and Gavaudan and HAL Trust 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.