Correlation Between Les Hotels and Accor S
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Accor S 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 Les Hotels and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Hotels Bav and Accor S A, you can compare the effects of market volatilities on Les Hotels and Accor S 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 Les Hotels with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Accor S.
Diversification Opportunities for Les Hotels and Accor S
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Les and Accor is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Les Hotels 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 Les Hotels Bav are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Les Hotels i.e., Les Hotels and Accor S go up and down completely randomly.
Pair Corralation between Les Hotels and Accor S
Assuming the 90 days trading horizon Les Hotels Bav is expected to under-perform the Accor S. But the stock apears to be less risky and, when comparing its historical volatility, Les Hotels Bav is 3.85 times less risky than Accor S. The stock trades about -0.3 of its potential returns per unit of risk. The Accor S A is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,227 in Accor S A on August 28, 2024 and sell it today you would earn a total of 128.00 from holding Accor S A or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Les Hotels Bav vs. Accor S A
Performance |
| Timeline |
| Les Hotels Bav |
| Accor S A |
Les Hotels and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Accor S
The main advantage of trading using opposite Les Hotels and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.| Les Hotels vs. SA Catana Group | Les Hotels vs. Reworld Media | Les Hotels vs. Biosynex | Les Hotels vs. Moulinvest |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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