Correlation Between Invibes Advertising and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Invibes Advertising and Les Hotels 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 Invibes Advertising and Les Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invibes Advertising NV and Les Hotels Bav, you can compare the effects of market volatilities on Invibes Advertising and Les Hotels 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 Invibes Advertising with a short position of Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invibes Advertising and Les Hotels.
Diversification Opportunities for Invibes Advertising and Les Hotels
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Invibes and Les is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Invibes Advertising NV and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav and Invibes Advertising 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 Invibes Advertising NV are associated (or correlated) with Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Invibes Advertising i.e., Invibes Advertising and Les Hotels go up and down completely randomly.
Pair Corralation between Invibes Advertising and Les Hotels
Assuming the 90 days trading horizon Invibes Advertising NV is expected to under-perform the Les Hotels. In addition to that, Invibes Advertising is 1.68 times more volatile than Les Hotels Bav. It trades about 0.0 of its total potential returns per unit of risk. Les Hotels Bav is currently generating about 0.07 per unit of volatility. If you would invest 7,150 in Les Hotels Bav on October 26, 2024 and sell it today you would earn a total of 250.00 from holding Les Hotels Bav or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invibes Advertising NV vs. Les Hotels Bav
Performance |
| Timeline |
| Invibes Advertising |
| Les Hotels Bav |
Invibes Advertising and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invibes Advertising and Les Hotels
The main advantage of trading using opposite Invibes Advertising and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invibes Advertising position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Invibes Advertising vs. Streamwide | Invibes Advertising vs. Claranova SE | Invibes Advertising vs. SA Catana Group | Invibes Advertising vs. Wallix Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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