Correlation Between Groupe LDLC and Centrale DAchat
Can any of the company-specific risk be diversified away by investing in both Groupe LDLC 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 Groupe LDLC and Centrale DAchat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe LDLC SA and Centrale dAchat Franaise, you can compare the effects of market volatilities on Groupe LDLC 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 Groupe LDLC with a short position of Centrale DAchat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and Centrale DAchat.
Diversification Opportunities for Groupe LDLC and Centrale DAchat
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Groupe and Centrale is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC 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 Groupe LDLC 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 Groupe LDLC 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 Groupe LDLC i.e., Groupe LDLC and Centrale DAchat go up and down completely randomly.
Pair Corralation between Groupe LDLC and Centrale DAchat
Assuming the 90 days trading horizon Groupe LDLC SA is expected to under-perform the Centrale DAchat. In addition to that, Groupe LDLC is 1.62 times more volatile than Centrale dAchat Franaise. It trades about -0.09 of its total potential returns per unit of risk. Centrale dAchat Franaise is currently generating about -0.01 per unit of volatility. If you would invest 860.00 in Centrale dAchat Franaise on September 1, 2024 and sell it today you would lose (52.00) from holding Centrale dAchat Franaise or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
Groupe LDLC SA vs. Centrale dAchat Franaise
Performance |
| Timeline |
| Groupe LDLC SA |
| Centrale dAchat Franaise |
Groupe LDLC and Centrale DAchat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe LDLC and Centrale DAchat
The main advantage of trading using opposite Groupe LDLC and Centrale DAchat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe LDLC 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.| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs SA |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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