Correlation Between Akwel SA and Groupe LDLC
Can any of the company-specific risk be diversified away by investing in both Akwel SA and Groupe LDLC 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 Akwel SA and Groupe LDLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akwel SA and Groupe LDLC SA, you can compare the effects of market volatilities on Akwel SA and Groupe LDLC 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 Akwel SA with a short position of Groupe LDLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akwel SA and Groupe LDLC.
Diversification Opportunities for Akwel SA and Groupe LDLC
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akwel and Groupe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Akwel SA and Groupe LDLC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe LDLC SA and Akwel SA 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 Akwel SA are associated (or correlated) with Groupe LDLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe LDLC SA has no effect on the direction of Akwel SA i.e., Akwel SA and Groupe LDLC go up and down completely randomly.
Pair Corralation between Akwel SA and Groupe LDLC
Assuming the 90 days trading horizon Akwel SA is expected to under-perform the Groupe LDLC. But the stock apears to be less risky and, when comparing its historical volatility, Akwel SA is 1.4 times less risky than Groupe LDLC. The stock trades about -0.14 of its potential returns per unit of risk. The Groupe LDLC SA is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,706 in Groupe LDLC SA on September 1, 2024 and sell it today you would lose (700.00) from holding Groupe LDLC SA or give up 41.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Akwel SA vs. Groupe LDLC SA
Performance |
| Timeline |
| Akwel SA |
| Groupe LDLC SA |
Akwel SA and Groupe LDLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akwel SA and Groupe LDLC
The main advantage of trading using opposite Akwel SA and Groupe LDLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akwel SA position performs unexpectedly, Groupe LDLC 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 Groupe LDLC will offset losses from the drop in Groupe LDLC's long position.| Akwel SA vs. Vente Unique | Akwel SA vs. Groupe Sfpi | Akwel SA vs. Cegedim SA | Akwel SA vs. SA Catana Group |
| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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