Correlation Between Adomos SA and Hermes International
Can any of the company-specific risk be diversified away by investing in both Adomos SA and Hermes International 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 Adomos SA and Hermes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adomos SA and Hermes International SCA, you can compare the effects of market volatilities on Adomos SA and Hermes International 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 Adomos SA with a short position of Hermes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adomos SA and Hermes International.
Diversification Opportunities for Adomos SA and Hermes International
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Adomos and Hermes is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Adomos SA and Hermes International SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hermes International SCA and Adomos 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 Adomos SA are associated (or correlated) with Hermes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hermes International SCA has no effect on the direction of Adomos SA i.e., Adomos SA and Hermes International go up and down completely randomly.
Pair Corralation between Adomos SA and Hermes International
Assuming the 90 days trading horizon Adomos SA is expected to generate 8.72 times more return on investment than Hermes International. However, Adomos SA is 8.72 times more volatile than Hermes International SCA. It trades about 0.07 of its potential returns per unit of risk. Hermes International SCA is currently generating about 0.0 per unit of risk. If you would invest 0.02 in Adomos SA on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Adomos SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adomos SA vs. Hermes International SCA
Performance |
| Timeline |
| Adomos SA |
| Hermes International SCA |
Adomos SA and Hermes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adomos SA and Hermes International
The main advantage of trading using opposite Adomos SA and Hermes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adomos SA position performs unexpectedly, Hermes International 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 Hermes International will offset losses from the drop in Hermes International's long position.| Adomos SA vs. Acheter Louer | Adomos SA vs. Avenir Telecom SA | Adomos SA vs. Europlasma SA | Adomos SA vs. Neovacs SA |
| Hermes International vs. FIPP SA | Hermes International vs. Adomos SA | Hermes International vs. Acanthe Dveloppement | Hermes International vs. Acheter Louer |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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