Correlation Between Carrefour and Les Htels
Can any of the company-specific risk be diversified away by investing in both Carrefour and Les Htels 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 Carrefour and Les Htels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA and Les Htels de, you can compare the effects of market volatilities on Carrefour and Les Htels 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 Carrefour with a short position of Les Htels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Les Htels.
Diversification Opportunities for Carrefour and Les Htels
Average diversification
The 3 months correlation between Carrefour and Les is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Les Htels de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Htels de and Carrefour 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 Carrefour SA are associated (or correlated) with Les Htels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Htels de has no effect on the direction of Carrefour i.e., Carrefour and Les Htels go up and down completely randomly.
Pair Corralation between Carrefour and Les Htels
Assuming the 90 days horizon Carrefour SA is expected to generate 0.15 times more return on investment than Les Htels. However, Carrefour SA is 6.69 times less risky than Les Htels. It trades about -0.04 of its potential returns per unit of risk. Les Htels de is currently generating about -0.05 per unit of risk. If you would invest 1,460 in Carrefour SA on August 28, 2024 and sell it today you would lose (12.00) from holding Carrefour SA or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA vs. Les Htels de
Performance |
| Timeline |
| Carrefour SA |
| Les Htels de |
Carrefour and Les Htels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Les Htels
The main advantage of trading using opposite Carrefour and Les Htels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour position performs unexpectedly, Les Htels 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 Les Htels will offset losses from the drop in Les Htels' long position.| Carrefour vs. Lagardere SCA | Carrefour vs. Mtropole Tlvision SA | Carrefour vs. Mercialys SA | Carrefour vs. Nexity |
| Les Htels vs. Bouygues SA | Les Htels vs. Capgemini SE | Les Htels vs. Carrefour SA | Les Htels vs. Pernod Ricard 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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