Correlation Between Berkeley Lights and Eutelsat Communicati

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Can any of the company-specific risk be diversified away by investing in both Berkeley Lights and Eutelsat Communicati 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 Berkeley Lights and Eutelsat Communicati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkeley Lights and Eutelsat Communicati, you can compare the effects of market volatilities on Berkeley Lights and Eutelsat Communicati 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 Berkeley Lights with a short position of Eutelsat Communicati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Lights and Eutelsat Communicati.

Diversification Opportunities for Berkeley Lights and Eutelsat Communicati

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Berkeley and Eutelsat is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Lights and Eutelsat Communicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eutelsat Communicati and Berkeley Lights 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 Berkeley Lights are associated (or correlated) with Eutelsat Communicati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eutelsat Communicati has no effect on the direction of Berkeley Lights i.e., Berkeley Lights and Eutelsat Communicati go up and down completely randomly.

Pair Corralation between Berkeley Lights and Eutelsat Communicati

Considering the 90-day investment horizon Berkeley Lights is expected to under-perform the Eutelsat Communicati. In addition to that, Berkeley Lights is 2.3 times more volatile than Eutelsat Communicati. It trades about -0.09 of its total potential returns per unit of risk. Eutelsat Communicati is currently generating about 0.0 per unit of volatility. If you would invest  1,056  in Eutelsat Communicati on September 1, 2022 and sell it today you would lose (206.00)  from holding Eutelsat Communicati or give up 19.51% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Berkeley Lights  vs.  Eutelsat Communicati

 Performance (%) 
       Timeline  
Berkeley Lights 
Berkeley Performance
0 of 100
Over the last 90 days Berkeley Lights has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Berkeley Price Channel

Eutelsat Communicati 
Eutelsat Performance
0 of 100
Over the last 90 days Eutelsat Communicati has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Eutelsat Communicati is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eutelsat Price Channel

Berkeley Lights and Eutelsat Communicati Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Berkeley Lights and Eutelsat Communicati

The main advantage of trading using opposite Berkeley Lights and Eutelsat Communicati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkeley Lights position performs unexpectedly, Eutelsat Communicati 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 Eutelsat Communicati will offset losses from the drop in Eutelsat Communicati's long position.
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The idea behind Berkeley Lights and Eutelsat Communicati 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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Check out your portfolio center. 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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