Correlation Between Les Hotels and Fiducial Office
Can any of the company-specific risk be diversified away by investing in both Les Hotels and Fiducial Office 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 Fiducial Office 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 Fiducial Office Solutions, you can compare the effects of market volatilities on Les Hotels and Fiducial Office 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 Fiducial Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Hotels and Fiducial Office.
Diversification Opportunities for Les Hotels and Fiducial Office
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Les and Fiducial is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Les Hotels Bav and Fiducial Office Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiducial Office Solutions 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 Fiducial Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiducial Office Solutions has no effect on the direction of Les Hotels i.e., Les Hotels and Fiducial Office go up and down completely randomly.
Pair Corralation between Les Hotels and Fiducial Office
Assuming the 90 days trading horizon Les Hotels Bav is expected to generate 1.82 times more return on investment than Fiducial Office. However, Les Hotels is 1.82 times more volatile than Fiducial Office Solutions. It trades about 0.23 of its potential returns per unit of risk. Fiducial Office Solutions is currently generating about 0.0 per unit of risk. If you would invest 7,150 in Les Hotels Bav on September 5, 2024 and sell it today you would earn a total of 200.00 from holding Les Hotels Bav or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Les Hotels Bav vs. Fiducial Office Solutions
Performance |
| Timeline |
| Les Hotels Bav |
| Fiducial Office Solutions |
Les Hotels and Fiducial Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Hotels and Fiducial Office
The main advantage of trading using opposite Les Hotels and Fiducial Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Hotels position performs unexpectedly, Fiducial Office 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 Fiducial Office will offset losses from the drop in Fiducial Office'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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