Correlation Between Delfingen and Poujoulat
Can any of the company-specific risk be diversified away by investing in both Delfingen and Poujoulat 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 Delfingen and Poujoulat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delfingen and Poujoulat SA, you can compare the effects of market volatilities on Delfingen and Poujoulat 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 Delfingen with a short position of Poujoulat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delfingen and Poujoulat.
Diversification Opportunities for Delfingen and Poujoulat
Very poor diversification
The 3 months correlation between Delfingen and Poujoulat is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Delfingen and Poujoulat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poujoulat SA and Delfingen 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 Delfingen are associated (or correlated) with Poujoulat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poujoulat SA has no effect on the direction of Delfingen i.e., Delfingen and Poujoulat go up and down completely randomly.
Pair Corralation between Delfingen and Poujoulat
Assuming the 90 days trading horizon Delfingen is expected to under-perform the Poujoulat. But the stock apears to be less risky and, when comparing its historical volatility, Delfingen is 1.16 times less risky than Poujoulat. The stock trades about -0.11 of its potential returns per unit of risk. The Poujoulat SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,519 in Poujoulat SA on August 30, 2024 and sell it today you would lose (1,509) from holding Poujoulat SA or give up 59.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delfingen vs. Poujoulat SA
Performance |
| Timeline |
| Delfingen |
| Poujoulat SA |
Delfingen and Poujoulat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delfingen and Poujoulat
The main advantage of trading using opposite Delfingen and Poujoulat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delfingen position performs unexpectedly, Poujoulat 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 Poujoulat will offset losses from the drop in Poujoulat's long position.| Delfingen vs. Akwel SA | Delfingen vs. Groupe Guillin SA | Delfingen vs. Burelle SA | Delfingen vs. SA Catana Group |
| Poujoulat vs. Moulinvest | Poujoulat vs. SA Catana Group | Poujoulat vs. Piscines Desjoyaux SA | Poujoulat vs. Thermador Groupe 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 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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