Correlation Between Groupe LDLC and Claranova
Can any of the company-specific risk be diversified away by investing in both Groupe LDLC and Claranova 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 Claranova 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 Claranova SE, you can compare the effects of market volatilities on Groupe LDLC and Claranova 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 Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and Claranova.
Diversification Opportunities for Groupe LDLC and Claranova
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Groupe and Claranova is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE 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 Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Groupe LDLC i.e., Groupe LDLC and Claranova go up and down completely randomly.
Pair Corralation between Groupe LDLC and Claranova
Assuming the 90 days trading horizon Groupe LDLC SA is expected to under-perform the Claranova. In addition to that, Groupe LDLC is 1.58 times more volatile than Claranova SE. It trades about -0.37 of its total potential returns per unit of risk. Claranova SE is currently generating about 0.07 per unit of volatility. If you would invest 143.00 in Claranova SE on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Claranova SE or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe LDLC SA vs. Claranova SE
Performance |
| Timeline |
| Groupe LDLC SA |
| Claranova SE |
Groupe LDLC and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe LDLC and Claranova
The main advantage of trading using opposite Groupe LDLC and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe LDLC position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs SA |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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