Correlation Between Verallia Société and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Verallia Société and RETAIL FOOD 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 Verallia Société and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verallia Socit Anonyme and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Verallia Société and RETAIL FOOD 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 Verallia Société with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verallia Société and RETAIL FOOD.
Diversification Opportunities for Verallia Société and RETAIL FOOD
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Verallia and RETAIL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Verallia Socit Anonyme and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and Verallia Société 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 Verallia Socit Anonyme are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Verallia Société i.e., Verallia Société and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Verallia Société and RETAIL FOOD
Assuming the 90 days trading horizon Verallia Socit Anonyme is expected to generate 0.09 times more return on investment than RETAIL FOOD. However, Verallia Socit Anonyme is 11.08 times less risky than RETAIL FOOD. It trades about -0.22 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.23 per unit of risk. If you would invest 2,704 in Verallia Socit Anonyme on September 13, 2024 and sell it today you would lose (256.00) from holding Verallia Socit Anonyme or give up 9.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Verallia Socit Anonyme vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Verallia Socit Anonyme |
| RETAIL FOOD GROUP |
Verallia Société and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verallia Société and RETAIL FOOD
The main advantage of trading using opposite Verallia Société and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verallia Société position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Verallia Société vs. Canon Marketing Japan | Verallia Société vs. Samsung Electronics Co | Verallia Société vs. Nucletron Electronic Aktiengesellschaft | Verallia Société vs. CarsalesCom |
| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
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 the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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