Correlation Between Emova Group and Centrale DAchat
Can any of the company-specific risk be diversified away by investing in both Emova Group and Centrale DAchat 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 Centrale DAchat 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 Centrale dAchat Franaise, you can compare the effects of market volatilities on Emova Group and Centrale DAchat 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 Centrale DAchat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emova Group and Centrale DAchat.
Diversification Opportunities for Emova Group and Centrale DAchat
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emova and Centrale is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Emova Group SA and Centrale dAchat Franaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrale dAchat Franaise 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 Centrale DAchat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrale dAchat Franaise has no effect on the direction of Emova Group i.e., Emova Group and Centrale DAchat go up and down completely randomly.
Pair Corralation between Emova Group and Centrale DAchat
Assuming the 90 days trading horizon Emova Group SA is expected to under-perform the Centrale DAchat. In addition to that, Emova Group is 1.96 times more volatile than Centrale dAchat Franaise. It trades about -0.05 of its total potential returns per unit of risk. Centrale dAchat Franaise is currently generating about 0.02 per unit of volatility. If you would invest 806.00 in Centrale dAchat Franaise on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Centrale dAchat Franaise or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emova Group SA vs. Centrale dAchat Franaise
Performance |
| Timeline |
| Emova Group SA |
| Centrale dAchat Franaise |
Emova Group and Centrale DAchat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emova Group and Centrale DAchat
The main advantage of trading using opposite Emova Group and Centrale DAchat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emova Group position performs unexpectedly, Centrale DAchat 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 Centrale DAchat will offset losses from the drop in Centrale DAchat's long position.| Emova Group vs. Claranova SE | Emova Group vs. Nextedia | Emova Group vs. Orapi SA | Emova Group vs. Acheter Louer |
| Centrale DAchat vs. Vente Unique | Centrale DAchat vs. Groupe Sfpi | Centrale DAchat vs. Cegedim SA | Centrale DAchat vs. SA Catana Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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