Correlation Between Idsud SA and Hotel Majestic
Can any of the company-specific risk be diversified away by investing in both Idsud SA and Hotel Majestic 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 Idsud SA and Hotel Majestic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Idsud SA and Hotel Majestic Cannes, you can compare the effects of market volatilities on Idsud SA and Hotel Majestic 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 Idsud SA with a short position of Hotel Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Idsud SA and Hotel Majestic.
Diversification Opportunities for Idsud SA and Hotel Majestic
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Idsud and Hotel is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Idsud SA and Hotel Majestic Cannes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Majestic Cannes and Idsud 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 Idsud SA are associated (or correlated) with Hotel Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Majestic Cannes has no effect on the direction of Idsud SA i.e., Idsud SA and Hotel Majestic go up and down completely randomly.
Pair Corralation between Idsud SA and Hotel Majestic
Assuming the 90 days trading horizon Idsud SA is expected to generate 0.34 times more return on investment than Hotel Majestic. However, Idsud SA is 2.93 times less risky than Hotel Majestic. It trades about 0.02 of its potential returns per unit of risk. Hotel Majestic Cannes is currently generating about -0.05 per unit of risk. If you would invest 18,930 in Idsud SA on August 31, 2024 and sell it today you would earn a total of 110.00 from holding Idsud SA or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Idsud SA vs. Hotel Majestic Cannes
Performance |
| Timeline |
| Idsud SA |
| Hotel Majestic Cannes |
Idsud SA and Hotel Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Idsud SA and Hotel Majestic
The main advantage of trading using opposite Idsud SA and Hotel Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Idsud SA position performs unexpectedly, Hotel Majestic 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 Hotel Majestic will offset losses from the drop in Hotel Majestic's long position.| Idsud SA vs. Amundi SA | Idsud SA vs. Teleperformance SE | Idsud SA vs. Eurofins Scientific SE | Idsud SA vs. Sartorius Stedim Biotech |
| Hotel Majestic vs. Les Hotels Bav | Hotel Majestic vs. Groupe Partouche SA | Hotel Majestic vs. Centrale dAchat Franaise | Hotel Majestic vs. Manitou BF 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 CEOs Directory module to screen CEOs from public companies around the world.
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