Correlation Between Centrale DAchat and Accor S
Can any of the company-specific risk be diversified away by investing in both Centrale DAchat and Accor S 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 Centrale DAchat and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrale dAchat Franaise and Accor S A, you can compare the effects of market volatilities on Centrale DAchat and Accor S 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 Centrale DAchat with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrale DAchat and Accor S.
Diversification Opportunities for Centrale DAchat and Accor S
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrale and Accor is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Centrale dAchat Franaise and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Centrale DAchat 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 Centrale dAchat Franaise are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Centrale DAchat i.e., Centrale DAchat and Accor S go up and down completely randomly.
Pair Corralation between Centrale DAchat and Accor S
Assuming the 90 days trading horizon Centrale dAchat Franaise is expected to generate 1.02 times more return on investment than Accor S. However, Centrale DAchat is 1.02 times more volatile than Accor S A. It trades about 0.08 of its potential returns per unit of risk. Accor S A is currently generating about 0.06 per unit of risk. If you would invest 782.00 in Centrale dAchat Franaise on November 30, 2024 and sell it today you would earn a total of 30.00 from holding Centrale dAchat Franaise or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrale dAchat Franaise vs. Accor S A
Performance |
| Timeline |
| Centrale dAchat Franaise |
| Accor S A |
Centrale DAchat and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrale DAchat and Accor S
The main advantage of trading using opposite Centrale DAchat and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrale DAchat position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.| Centrale DAchat vs. Vente Unique | Centrale DAchat vs. Groupe Sfpi | Centrale DAchat vs. Cegedim SA | Centrale DAchat vs. SA Catana Group |
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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