Correlation Between Invibes Advertising and Covivio Hotels
Can any of the company-specific risk be diversified away by investing in both Invibes Advertising and Covivio 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 Covivio 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 Covivio Hotels, you can compare the effects of market volatilities on Invibes Advertising and Covivio 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 Covivio Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invibes Advertising and Covivio Hotels.
Diversification Opportunities for Invibes Advertising and Covivio Hotels
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invibes and Covivio is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Invibes Advertising NV and Covivio Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio Hotels 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 Covivio Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio Hotels has no effect on the direction of Invibes Advertising i.e., Invibes Advertising and Covivio Hotels go up and down completely randomly.
Pair Corralation between Invibes Advertising and Covivio Hotels
Assuming the 90 days trading horizon Invibes Advertising NV is expected to under-perform the Covivio Hotels. In addition to that, Invibes Advertising is 4.75 times more volatile than Covivio Hotels. It trades about -0.35 of its total potential returns per unit of risk. Covivio Hotels is currently generating about -0.21 per unit of volatility. If you would invest 1,885 in Covivio Hotels on August 26, 2024 and sell it today you would lose (35.00) from holding Covivio Hotels or give up 1.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invibes Advertising NV vs. Covivio Hotels
Performance |
| Timeline |
| Invibes Advertising |
| Covivio Hotels |
Invibes Advertising and Covivio Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invibes Advertising and Covivio Hotels
The main advantage of trading using opposite Invibes Advertising and Covivio Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invibes Advertising position performs unexpectedly, Covivio 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 Covivio Hotels will offset losses from the drop in Covivio Hotels' long position.| Invibes Advertising vs. Streamwide | Invibes Advertising vs. Claranova SE | Invibes Advertising vs. SA Catana Group | Invibes Advertising vs. Wallix Group SA |
| Covivio Hotels vs. Fonciere Lyonnaise | Covivio Hotels vs. Fonciere Inea | Covivio Hotels vs. Immobiliere Dassault SA | Covivio Hotels vs. Frey 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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