Correlation Between Adocia and Cnova NV
Can any of the company-specific risk be diversified away by investing in both Adocia and Cnova NV 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 Adocia and Cnova NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adocia and Cnova NV, you can compare the effects of market volatilities on Adocia and Cnova NV 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 Adocia with a short position of Cnova NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adocia and Cnova NV.
Diversification Opportunities for Adocia and Cnova NV
Pay attention - limited upside
The 3 months correlation between Adocia and Cnova is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Adocia and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV and Adocia 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 Adocia are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Adocia i.e., Adocia and Cnova NV go up and down completely randomly.
Pair Corralation between Adocia and Cnova NV
Assuming the 90 days trading horizon Adocia is expected to generate 0.25 times more return on investment than Cnova NV. However, Adocia is 3.97 times less risky than Cnova NV. It trades about 0.15 of its potential returns per unit of risk. Cnova NV is currently generating about 0.03 per unit of risk. If you would invest 584.00 in Adocia on August 30, 2024 and sell it today you would earn a total of 235.00 from holding Adocia or generate 40.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adocia vs. Cnova NV
Performance |
| Timeline |
| Adocia |
| Cnova NV |
Adocia and Cnova NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adocia and Cnova NV
The main advantage of trading using opposite Adocia and Cnova NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adocia position performs unexpectedly, Cnova NV 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 Cnova NV will offset losses from the drop in Cnova NV's long position.The idea behind Adocia and Cnova NV 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.| Cnova NV vs. Casino Guichard Perrachon | Cnova NV vs. Rallye SA | Cnova NV vs. Carmila SA | Cnova NV vs. Burelle 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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