Correlation Between Carrefour and Lagardere SCA
Can any of the company-specific risk be diversified away by investing in both Carrefour and Lagardere SCA 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 Lagardere SCA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA and Lagardere SCA, you can compare the effects of market volatilities on Carrefour and Lagardere SCA 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 Lagardere SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Lagardere SCA.
Diversification Opportunities for Carrefour and Lagardere SCA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carrefour and Lagardere is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Lagardere SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lagardere SCA 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 Lagardere SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lagardere SCA has no effect on the direction of Carrefour i.e., Carrefour and Lagardere SCA go up and down completely randomly.
Pair Corralation between Carrefour and Lagardere SCA
Assuming the 90 days horizon Carrefour SA is expected to under-perform the Lagardere SCA. But the stock apears to be less risky and, when comparing its historical volatility, Carrefour SA is 1.04 times less risky than Lagardere SCA. The stock trades about -0.01 of its potential returns per unit of risk. The Lagardere SCA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,034 in Lagardere SCA on August 31, 2024 and sell it today you would earn a total of 66.00 from holding Lagardere SCA or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA vs. Lagardere SCA
Performance |
| Timeline |
| Carrefour SA |
| Lagardere SCA |
Carrefour and Lagardere SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Lagardere SCA
The main advantage of trading using opposite Carrefour and Lagardere SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour position performs unexpectedly, Lagardere SCA 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 Lagardere SCA will offset losses from the drop in Lagardere SCA's long position.| Carrefour vs. Danone SA | Carrefour vs. Renault SA | Carrefour vs. AXA SA | Carrefour vs. Compagnie de Saint Gobain |
| Lagardere SCA vs. Television Francaise 1 | Lagardere SCA vs. Publicis Groupe SA | Lagardere SCA vs. Bouygues SA | Lagardere SCA vs. Accor S A |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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