Correlation Between Akwel SA and Thermador Groupe
Can any of the company-specific risk be diversified away by investing in both Akwel SA and Thermador Groupe 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 Thermador Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akwel SA and Thermador Groupe SA, you can compare the effects of market volatilities on Akwel SA and Thermador Groupe 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 Thermador Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akwel SA and Thermador Groupe.
Diversification Opportunities for Akwel SA and Thermador Groupe
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Akwel and Thermador is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Akwel SA and Thermador Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermador Groupe 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 Thermador Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermador Groupe has no effect on the direction of Akwel SA i.e., Akwel SA and Thermador Groupe go up and down completely randomly.
Pair Corralation between Akwel SA and Thermador Groupe
Assuming the 90 days trading horizon Akwel SA is expected to under-perform the Thermador Groupe. In addition to that, Akwel SA is 2.19 times more volatile than Thermador Groupe SA. It trades about -0.12 of its total potential returns per unit of risk. Thermador Groupe SA is currently generating about -0.25 per unit of volatility. If you would invest 7,580 in Thermador Groupe SA on September 12, 2024 and sell it today you would lose (560.00) from holding Thermador Groupe SA or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akwel SA vs. Thermador Groupe SA
Performance |
| Timeline |
| Akwel SA |
| Thermador Groupe |
Akwel SA and Thermador Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akwel SA and Thermador Groupe
The main advantage of trading using opposite Akwel SA and Thermador Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akwel SA position performs unexpectedly, Thermador Groupe 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 Thermador Groupe will offset losses from the drop in Thermador Groupe's long position.| Akwel SA vs. SA Catana Group | Akwel SA vs. Verallia | Akwel SA vs. Thermador Groupe SA | Akwel SA vs. Maisons du Monde |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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