Correlation Between Groupe LDLC and OVH Groupe
Can any of the company-specific risk be diversified away by investing in both Groupe LDLC and OVH Groupe 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 OVH Groupe 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 OVH Groupe SAS, you can compare the effects of market volatilities on Groupe LDLC and OVH Groupe 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 OVH Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and OVH Groupe.
Diversification Opportunities for Groupe LDLC and OVH Groupe
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Groupe and OVH is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC SA and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe SAS 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 OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of Groupe LDLC i.e., Groupe LDLC and OVH Groupe go up and down completely randomly.
Pair Corralation between Groupe LDLC and OVH Groupe
Assuming the 90 days trading horizon Groupe LDLC SA is expected to under-perform the OVH Groupe. In addition to that, Groupe LDLC is 3.39 times more volatile than OVH Groupe SAS. It trades about -0.29 of its total potential returns per unit of risk. OVH Groupe SAS is currently generating about -0.1 per unit of volatility. If you would invest 851.00 in OVH Groupe SAS on September 15, 2024 and sell it today you would lose (19.00) from holding OVH Groupe SAS or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Groupe LDLC SA vs. OVH Groupe SAS
Performance |
| Timeline |
| Groupe LDLC SA |
| OVH Groupe SAS |
Groupe LDLC and OVH Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe LDLC and OVH Groupe
The main advantage of trading using opposite Groupe LDLC and OVH Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe LDLC position performs unexpectedly, OVH Groupe 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 OVH Groupe will offset losses from the drop in OVH Groupe's long position.| Groupe LDLC vs. OVH Groupe SAS | Groupe LDLC vs. Aramis SAS | Groupe LDLC vs. Neoen SA | Groupe LDLC vs. Technip Energies BV |
| OVH Groupe vs. LVMH Mot Hennessy | OVH Groupe vs. LOreal SA | OVH Groupe vs. Hermes International SCA | OVH Groupe 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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