Correlation Between Les Hotels and Cibox Interctive
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Cibox Interctive 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 Cibox Interctive 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 Cibox Interctive SA, you can compare the effects of market volatilities on Les Hotels and Cibox Interctive 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 Cibox Interctive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Cibox Interctive.
Diversification Opportunities for Les Hotels and Cibox Interctive
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Les and Cibox is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Cibox Interctive SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cibox Interctive 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 Cibox Interctive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cibox Interctive has no effect on the direction of Les Hotels i.e., Les Hotels and Cibox Interctive go up and down completely randomly.
Pair Corralation between Les Hotels and Cibox Interctive
Assuming the 90 days trading horizon Les Hotels is expected to generate 3.96 times less return on investment than Cibox Interctive. But when comparing it to its historical volatility, Les Hotels Bav is 5.26 times less risky than Cibox Interctive. It trades about 0.03 of its potential returns per unit of risk. Cibox Interctive SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6.36 in Cibox Interctive SA on September 5, 2024 and sell it today you would lose (2.90) from holding Cibox Interctive SA or give up 45.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.66% |
| Values | Daily Returns |
Les Hotels Bav vs. Cibox Interctive SA
Performance |
| Timeline |
| Les Hotels Bav |
| Cibox Interctive |
Les Hotels and Cibox Interctive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Cibox Interctive
The main advantage of trading using opposite Les Hotels and Cibox Interctive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Cibox Interctive 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 Cibox Interctive will offset losses from the drop in Cibox Interctive's long position.| Les Hotels vs. SA Catana Group | Les Hotels vs. Trigano SA | Les Hotels vs. Bnteau SA | Les Hotels vs. Piscines Desjoyaux SA |
| Cibox Interctive vs. ZCCM Investments Holdings | Cibox Interctive vs. Eutelsat Communications SA | Cibox Interctive vs. Diagnostic Medical Systems | Cibox Interctive vs. Hotel Majestic Cannes |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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