Correlation Between ABC Arbitrage and Eurazeo
Can any of the company-specific risk be diversified away by investing in both ABC Arbitrage and Eurazeo 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 ABC Arbitrage and Eurazeo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABC arbitrage SA and Eurazeo, you can compare the effects of market volatilities on ABC Arbitrage and Eurazeo 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 ABC Arbitrage with a short position of Eurazeo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC Arbitrage and Eurazeo.
Diversification Opportunities for ABC Arbitrage and Eurazeo
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABC and Eurazeo is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding ABC arbitrage SA and Eurazeo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurazeo and ABC Arbitrage 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 ABC arbitrage SA are associated (or correlated) with Eurazeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurazeo has no effect on the direction of ABC Arbitrage i.e., ABC Arbitrage and Eurazeo go up and down completely randomly.
Pair Corralation between ABC Arbitrage and Eurazeo
Assuming the 90 days trading horizon ABC arbitrage SA is expected to generate 1.09 times more return on investment than Eurazeo. However, ABC Arbitrage is 1.09 times more volatile than Eurazeo. It trades about 0.04 of its potential returns per unit of risk. Eurazeo is currently generating about -0.02 per unit of risk. If you would invest 422.00 in ABC arbitrage SA on August 28, 2024 and sell it today you would earn a total of 56.00 from holding ABC arbitrage SA or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABC arbitrage SA vs. Eurazeo
Performance |
| Timeline |
| ABC arbitrage SA |
| Eurazeo |
ABC Arbitrage and Eurazeo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABC Arbitrage and Eurazeo
The main advantage of trading using opposite ABC Arbitrage and Eurazeo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC Arbitrage position performs unexpectedly, Eurazeo 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 Eurazeo will offset losses from the drop in Eurazeo's long position.| ABC Arbitrage vs. CBO Territoria SA | ABC Arbitrage vs. Rubis SCA | ABC Arbitrage vs. Nexity | ABC Arbitrage vs. Gaztransport Technigaz SAS |
| Eurazeo vs. Wendel | Eurazeo vs. Groep Brussel Lambert | Eurazeo vs. Ackermans Van Haaren | Eurazeo vs. SEB SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |