Correlation Between SA Catana and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both SA Catana and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement VE, you can compare the effects of market volatilities on SA Catana and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of SA Catana and Veolia Environnement.
Diversification Opportunities for SA Catana and Veolia Environnement
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between CATG and Veolia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of SA Catana i.e., SA Catana and Veolia Environnement go up and down completely randomly.
Pair Corralation between SA Catana and Veolia Environnement
Assuming the 90 days trading horizon SA Catana Group is expected to under-perform the Veolia Environnement. In addition to that, SA Catana is 1.89 times more volatile than Veolia Environnement VE. It trades about -0.04 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.06 per unit of volatility. If you would invest 3,102 in Veolia Environnement VE on August 26, 2024 and sell it today you would lose (318.00) from holding Veolia Environnement VE or give up 10.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SA Catana Group vs. Veolia Environnement VE
Performance |
| Timeline |
| SA Catana Group |
| Veolia Environnement |
SA Catana and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SA Catana and Veolia Environnement
The main advantage of trading using opposite SA Catana and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SA Catana position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| SA Catana vs. Veolia Environnement VE | SA Catana vs. Jacquet Metal Service | SA Catana vs. Fiducial Office Solutions | SA Catana vs. Bilendi |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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