Correlation Between Alimentation Couchen and Ceconomy
Can any of the company-specific risk be diversified away by investing in both Alimentation Couchen and Ceconomy 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 Alimentation Couchen and Ceconomy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimentation Couchen Tard and Ceconomy AG ADR, you can compare the effects of market volatilities on Alimentation Couchen and Ceconomy 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 Alimentation Couchen with a short position of Ceconomy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimentation Couchen and Ceconomy.
Diversification Opportunities for Alimentation Couchen and Ceconomy
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimentation and Ceconomy is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard and Ceconomy AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceconomy AG ADR and Alimentation Couchen 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 Alimentation Couchen Tard are associated (or correlated) with Ceconomy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceconomy AG ADR has no effect on the direction of Alimentation Couchen i.e., Alimentation Couchen and Ceconomy go up and down completely randomly.
Pair Corralation between Alimentation Couchen and Ceconomy
Assuming the 90 days horizon Alimentation Couchen Tard is expected to generate 0.34 times more return on investment than Ceconomy. However, Alimentation Couchen Tard is 2.97 times less risky than Ceconomy. It trades about 0.12 of its potential returns per unit of risk. Ceconomy AG ADR is currently generating about -0.08 per unit of risk. If you would invest 5,374 in Alimentation Couchen Tard on August 23, 2024 and sell it today you would earn a total of 257.00 from holding Alimentation Couchen Tard or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimentation Couchen Tard vs. Ceconomy AG ADR
Performance |
| Timeline |
| Alimentation Couchen Tard |
| Ceconomy AG ADR |
Alimentation Couchen and Ceconomy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimentation Couchen and Ceconomy
The main advantage of trading using opposite Alimentation Couchen and Ceconomy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen position performs unexpectedly, Ceconomy 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 Ceconomy will offset losses from the drop in Ceconomy's long position.| Alimentation Couchen vs. Burlington Stores | Alimentation Couchen vs. Childrens Place | Alimentation Couchen vs. Buckle Inc | Alimentation Couchen vs. Shoe Carnival |
| Ceconomy vs. Green River Gold | Ceconomy vs. Dixons Carphone plc | Ceconomy vs. Tandy Leather Factory | Ceconomy vs. Card Factory plc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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