Correlation Between Avenir Telecom and OSE Pharma
Can any of the company-specific risk be diversified away by investing in both Avenir Telecom and OSE Pharma 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 Avenir Telecom and OSE Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avenir Telecom SA and OSE Pharma SA, you can compare the effects of market volatilities on Avenir Telecom and OSE Pharma 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 Avenir Telecom with a short position of OSE Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avenir Telecom and OSE Pharma.
Diversification Opportunities for Avenir Telecom and OSE Pharma
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Avenir and OSE is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Avenir Telecom SA and OSE Pharma SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OSE Pharma SA and Avenir Telecom 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 Avenir Telecom SA are associated (or correlated) with OSE Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OSE Pharma SA has no effect on the direction of Avenir Telecom i.e., Avenir Telecom and OSE Pharma go up and down completely randomly.
Pair Corralation between Avenir Telecom and OSE Pharma
Assuming the 90 days trading horizon Avenir Telecom SA is expected to generate 0.77 times more return on investment than OSE Pharma. However, Avenir Telecom SA is 1.3 times less risky than OSE Pharma. It trades about -0.11 of its potential returns per unit of risk. OSE Pharma SA is currently generating about -0.23 per unit of risk. If you would invest 7.30 in Avenir Telecom SA on November 7, 2024 and sell it today you would lose (0.32) from holding Avenir Telecom SA or give up 4.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avenir Telecom SA vs. OSE Pharma SA
Performance |
| Timeline |
| Avenir Telecom SA |
| OSE Pharma SA |
Avenir Telecom and OSE Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avenir Telecom and OSE Pharma
The main advantage of trading using opposite Avenir Telecom and OSE Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avenir Telecom position performs unexpectedly, OSE Pharma 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 OSE Pharma will offset losses from the drop in OSE Pharma's long position.| Avenir Telecom vs. Acheter Louer | Avenir Telecom vs. Europlasma SA | Avenir Telecom vs. DBT SA | Avenir Telecom vs. Solocal Group SA |
| OSE Pharma vs. Innate Pharma | OSE Pharma vs. Quantum Genomics SA | OSE Pharma vs. Valneva SE | OSE Pharma vs. Poxel 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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