Correlation Between Granite 3x and Claranova
Can any of the company-specific risk be diversified away by investing in both Granite 3x and Claranova 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 Claranova 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 Claranova SE, you can compare the effects of market volatilities on Granite 3x and Claranova 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 Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite 3x and Claranova.
Diversification Opportunities for Granite 3x and Claranova
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Granite and Claranova is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Granite 3x LVMH and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE 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 Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Granite 3x i.e., Granite 3x and Claranova go up and down completely randomly.
Pair Corralation between Granite 3x and Claranova
Assuming the 90 days trading horizon Granite 3x LVMH is expected to under-perform the Claranova. In addition to that, Granite 3x is 1.76 times more volatile than Claranova SE. It trades about -0.05 of its total potential returns per unit of risk. Claranova SE is currently generating about -0.03 per unit of volatility. If you would invest 266.00 in Claranova SE on August 27, 2024 and sell it today you would lose (134.00) from holding Claranova SE or give up 50.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 72.29% |
| Values | Daily Returns |
Granite 3x LVMH vs. Claranova SE
Performance |
| Timeline |
| Granite 3x LVMH |
| Claranova SE |
Granite 3x and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite 3x and Claranova
The main advantage of trading using opposite Granite 3x and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite 3x position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.The idea behind Granite 3x LVMH and Claranova SE 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.| Claranova vs. Linedata Services SA | Claranova vs. Interparfums SA | Claranova vs. Esker SA | Claranova vs. Neurones |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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