Correlation Between Granite 3x and Riber SA
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Riber 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 Granite 3x and Riber SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite 3x LVMH and Riber SA, you can compare the effects of market volatilities on Granite 3x and Riber 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 Granite 3x with a short position of Riber SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Riber SA.
Diversification Opportunities for Granite 3x and Riber SA
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Riber is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Riber SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riber SA and Granite 3x 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 Granite 3x LVMH are associated (or correlated) with Riber SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riber SA has no effect on the direction of Granite 3x i.e., Granite 3x and Riber SA go up and down completely randomly.
Pair Corralation between Granite 3x and Riber SA
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Riber SA. In addition to that, Granite 3x is 2.5 times more volatile than Riber SA. It trades about -0.05 of its total potential returns per unit of risk. Riber SA is currently generating about 0.09 per unit of volatility. If you would invest 153.00 in Riber SA on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Riber SA or generate 65.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.79% |
| Values | Daily Returns |
Granite 3x LVMH vs. Riber SA
Performance |
| Timeline |
| Granite 3x LVMH |
| Riber SA |
Granite 3x and Riber SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Riber SA
The main advantage of trading using opposite Granite 3x and Riber SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Riber 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 Riber SA will offset losses from the drop in Riber SA's long position.The idea behind Granite 3x LVMH and Riber 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.| Riber SA vs. Vallourec | Riber SA vs. Dassault Systemes SE | Riber SA vs. Teleperformance SE | Riber SA vs. Atos SE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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