Correlation Between SA Catana and JC Decaux
Can any of the company-specific risk be diversified away by investing in both SA Catana and JC Decaux 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 SA Catana and JC Decaux into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SA Catana Group and JC Decaux SA, you can compare the effects of market volatilities on SA Catana and JC Decaux 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 SA Catana with a short position of JC Decaux. Check out your portfolio center. Please also check ongoing floating volatility patterns of SA Catana and JC Decaux.
Diversification Opportunities for SA Catana and JC Decaux
Good diversification
The 3 months correlation between CATG and DEC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and JC Decaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Decaux SA and SA Catana 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 SA Catana Group are associated (or correlated) with JC Decaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Decaux SA has no effect on the direction of SA Catana i.e., SA Catana and JC Decaux go up and down completely randomly.
Pair Corralation between SA Catana and JC Decaux
Assuming the 90 days trading horizon SA Catana Group is expected to generate 0.79 times more return on investment than JC Decaux. However, SA Catana Group is 1.27 times less risky than JC Decaux. It trades about 0.06 of its potential returns per unit of risk. JC Decaux SA is currently generating about -0.34 per unit of risk. If you would invest 446.00 in SA Catana Group on August 30, 2024 and sell it today you would earn a total of 12.00 from holding SA Catana Group or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SA Catana Group vs. JC Decaux SA
Performance |
| Timeline |
| SA Catana Group |
| JC Decaux SA |
SA Catana and JC Decaux Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SA Catana and JC Decaux
The main advantage of trading using opposite SA Catana and JC Decaux positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SA Catana position performs unexpectedly, JC Decaux 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 JC Decaux will offset losses from the drop in JC Decaux's long position.| SA Catana vs. Affluent Medical SAS | SA Catana vs. Gaztransport Technigaz SAS | SA Catana vs. Onlineformapro SA | SA Catana vs. Broadpeak SA |
| JC Decaux vs. Grolleau SAS | JC Decaux vs. Hydrogene De France | JC Decaux vs. Trigano SA | JC Decaux vs. Manitou BF 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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