Correlation Between Accor S and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both Accor S and Vivendi 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 Accor S and Vivendi SA 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 Vivendi SA, you can compare the effects of market volatilities on Accor S and Vivendi 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 Accor S with a short position of Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accor S and Vivendi SA.
Diversification Opportunities for Accor S and Vivendi SA
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Accor and Vivendi is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Accor S A and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA 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 Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of Accor S i.e., Accor S and Vivendi SA go up and down completely randomly.
Pair Corralation between Accor S and Vivendi SA
Assuming the 90 days horizon Accor S A is expected to generate 1.03 times more return on investment than Vivendi SA. However, Accor S is 1.03 times more volatile than Vivendi SA. It trades about 0.1 of its potential returns per unit of risk. Vivendi SA is currently generating about -0.44 per unit of risk. If you would invest 4,202 in Accor S A on August 31, 2024 and sell it today you would earn a total of 125.00 from holding Accor S A or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accor S A vs. Vivendi SA
Performance |
| Timeline |
| Accor S A |
| Vivendi SA |
Accor S and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accor S and Vivendi SA
The main advantage of trading using opposite Accor S and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accor S position performs unexpectedly, Vivendi 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.The idea behind Accor S A and Vivendi 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.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| 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 | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |