Correlation Between Les Hotels and Socit Htelire
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Socit Htelire 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 Socit Htelire 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 Socit Htelire et, you can compare the effects of market volatilities on Les Hotels and Socit Htelire 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 Socit Htelire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Socit Htelire.
Diversification Opportunities for Les Hotels and Socit Htelire
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Les and Socit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Socit Htelire et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Htelire et 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 Socit Htelire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Htelire et has no effect on the direction of Les Hotels i.e., Les Hotels and Socit Htelire go up and down completely randomly.
Pair Corralation between Les Hotels and Socit Htelire
Assuming the 90 days trading horizon Les Hotels Bav is expected to generate 0.78 times more return on investment than Socit Htelire. However, Les Hotels Bav is 1.28 times less risky than Socit Htelire. It trades about 0.02 of its potential returns per unit of risk. Socit Htelire et is currently generating about -0.01 per unit of risk. If you would invest 7,070 in Les Hotels Bav on September 1, 2024 and sell it today you would earn a total of 130.00 from holding Les Hotels Bav or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Les Hotels Bav vs. Socit Htelire et
Performance |
| Timeline |
| Les Hotels Bav |
| Socit Htelire et |
Les Hotels and Socit Htelire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Socit Htelire
The main advantage of trading using opposite Les Hotels and Socit Htelire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Socit Htelire 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 Socit Htelire will offset losses from the drop in Socit Htelire's long position.| Les Hotels vs. Vente Unique | Les Hotels vs. Groupe Sfpi | Les Hotels vs. Cegedim SA | Les Hotels vs. SA Catana Group |
| Socit Htelire vs. Avenir Telecom SA | Socit Htelire vs. Fiducial Office Solutions | Socit Htelire vs. Affluent Medical SAS | Socit Htelire vs. Sogeclair 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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