Correlation Between Emova Group and Acheter Louer
Can any of the company-specific risk be diversified away by investing in both Emova Group and Acheter Louer 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 Emova Group and Acheter Louer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emova Group SA and Acheter Louer, you can compare the effects of market volatilities on Emova Group and Acheter Louer 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 Emova Group with a short position of Acheter Louer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emova Group and Acheter Louer.
Diversification Opportunities for Emova Group and Acheter Louer
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emova and Acheter is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Emova Group SA and Acheter Louer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acheter Louer and Emova Group 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 Emova Group SA are associated (or correlated) with Acheter Louer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acheter Louer has no effect on the direction of Emova Group i.e., Emova Group and Acheter Louer go up and down completely randomly.
Pair Corralation between Emova Group and Acheter Louer
Assuming the 90 days trading horizon Emova Group is expected to generate 127.27 times less return on investment than Acheter Louer. But when comparing it to its historical volatility, Emova Group SA is 26.82 times less risky than Acheter Louer. It trades about 0.01 of its potential returns per unit of risk. Acheter Louer is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 100,000,000 in Acheter Louer on September 3, 2024 and sell it today you would lose (99,999,956) from holding Acheter Louer or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emova Group SA vs. Acheter Louer
Performance |
| Timeline |
| Emova Group SA |
| Acheter Louer |
Emova Group and Acheter Louer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emova Group and Acheter Louer
The main advantage of trading using opposite Emova Group and Acheter Louer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emova Group position performs unexpectedly, Acheter Louer 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 Acheter Louer will offset losses from the drop in Acheter Louer's long position.| Emova Group vs. Claranova SE | Emova Group vs. Nextedia | Emova Group vs. Orapi SA | Emova Group vs. Acheter Louer |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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