Correlation Between BELLUS Health and Deutsche Boerse

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

Diversification Opportunities for BELLUS Health and Deutsche Boerse

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between BELLUS and Deutsche is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding BELLUS Health and Deutsche Boerse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Boerse AG and BELLUS Health 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 BELLUS Health are associated (or correlated) with Deutsche Boerse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Boerse AG has no effect on the direction of BELLUS Health i.e., BELLUS Health and Deutsche Boerse go up and down completely randomly.

Pair Corralation between BELLUS Health and Deutsche Boerse

Considering the 90-day investment horizon BELLUS Health is expected to generate 1.04 times less return on investment than Deutsche Boerse. In addition to that, BELLUS Health is 1.83 times more volatile than Deutsche Boerse AG. It trades about 0.18 of its total potential returns per unit of risk. Deutsche Boerse AG is currently generating about 0.35 per unit of volatility. If you would invest  1,615  in Deutsche Boerse AG on September 9, 2022 and sell it today you would earn a total of  192.00  from holding Deutsche Boerse AG or generate 11.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

BELLUS Health  vs.  Deutsche Boerse AG

 Performance (%) 
       Timeline  
BELLUS Health 
BELLUS Performance
0 of 100
Over the last 90 days BELLUS Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2023. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BELLUS Price Channel

Deutsche Boerse AG 
Deutsche Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Boerse AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Deutsche Boerse may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Deutsche Price Channel

BELLUS Health and Deutsche Boerse Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BELLUS Health and Deutsche Boerse

The main advantage of trading using opposite BELLUS Health and Deutsche Boerse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BELLUS Health position performs unexpectedly, Deutsche Boerse 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 Deutsche Boerse will offset losses from the drop in Deutsche Boerse's long position.
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The idea behind BELLUS Health and Deutsche Boerse AG 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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