Correlation Between Arkema SA and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Arkema SA and Vita Coco 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 Arkema SA and Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA and Vita Coco, you can compare the effects of market volatilities on Arkema SA and Vita Coco 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 Arkema SA with a short position of Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and Vita Coco.
Diversification Opportunities for Arkema SA and Vita Coco
Significant diversification
The 3 months correlation between Arkema and Vita is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco and Arkema SA 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 Arkema SA are associated (or correlated) with Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Arkema SA i.e., Arkema SA and Vita Coco go up and down completely randomly.
Pair Corralation between Arkema SA and Vita Coco
Assuming the 90 days horizon Arkema SA is expected to generate 0.13 times more return on investment than Vita Coco. However, Arkema SA is 7.81 times less risky than Vita Coco. It trades about 0.31 of its potential returns per unit of risk. Vita Coco is currently generating about -0.18 per unit of risk. If you would invest 7,813 in Arkema SA on November 29, 2024 and sell it today you would earn a total of 252.00 from holding Arkema SA or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Arkema SA vs. Vita Coco
Performance |
| Timeline |
| Arkema SA |
| Vita Coco |
Arkema SA and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and Vita Coco
The main advantage of trading using opposite Arkema SA and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Arkema SA vs. Futuretech II Acquisition | Arkema SA vs. Black Spade Acquisition | Arkema SA vs. Cheche Group Class | Arkema SA vs. Pinterest |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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