Correlation Between Accor S and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Accor S and Les Hotels 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 Accor S and Les Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accor S A and Les Hotels Bav, you can compare the effects of market volatilities on Accor S and Les Hotels 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 Accor S with a short position of Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accor S and Les Hotels.
Diversification Opportunities for Accor S and Les Hotels
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Accor and Les is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Accor S A and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav and Accor S 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 Accor S A are associated (or correlated) with Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Accor S i.e., Accor S and Les Hotels go up and down completely randomly.
Pair Corralation between Accor S and Les Hotels
Assuming the 90 days horizon Accor S A is expected to generate 0.87 times more return on investment than Les Hotels. However, Accor S A is 1.16 times less risky than Les Hotels. It trades about 0.07 of its potential returns per unit of risk. Les Hotels Bav is currently generating about 0.02 per unit of risk. If you would invest 3,895 in Accor S A on September 1, 2024 and sell it today you would earn a total of 473.00 from holding Accor S A or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.71% |
| Values | Daily Returns |
Accor S A vs. Les Hotels Bav
Performance |
| Timeline |
| Accor S A |
| Les Hotels Bav |
Accor S and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accor S and Les Hotels
The main advantage of trading using opposite Accor S and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accor S position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Accor S vs. Les Hotels Bav | Accor S vs. Groupe Partouche SA | Accor S vs. Centrale dAchat Franaise | Accor S vs. Manitou BF SA |
| Les Hotels vs. Vente Unique | Les Hotels vs. Groupe Sfpi | Les Hotels vs. Cegedim SA | Les Hotels vs. SA Catana Group |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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