Correlation Between Claranova and Aeroports
Can any of the company-specific risk be diversified away by investing in both Claranova and Aeroports 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 Claranova and Aeroports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and Aeroports de Paris, you can compare the effects of market volatilities on Claranova and Aeroports 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 Claranova with a short position of Aeroports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Aeroports.
Diversification Opportunities for Claranova and Aeroports
Modest diversification
The 3 months correlation between Claranova and Aeroports is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Aeroports de Paris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroports de Paris and Claranova 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 Claranova SE are associated (or correlated) with Aeroports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroports de Paris has no effect on the direction of Claranova i.e., Claranova and Aeroports go up and down completely randomly.
Pair Corralation between Claranova and Aeroports
Assuming the 90 days trading horizon Claranova SE is expected to under-perform the Aeroports. In addition to that, Claranova is 2.15 times more volatile than Aeroports de Paris. It trades about -0.03 of its total potential returns per unit of risk. Aeroports de Paris is currently generating about -0.02 per unit of volatility. If you would invest 14,023 in Aeroports de Paris on August 25, 2024 and sell it today you would lose (3,163) from holding Aeroports de Paris or give up 22.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Claranova SE vs. Aeroports de Paris
Performance |
| Timeline |
| Claranova SE |
| Aeroports de Paris |
Claranova and Aeroports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Aeroports
The main advantage of trading using opposite Claranova and Aeroports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Aeroports 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 Aeroports will offset losses from the drop in Aeroports' long position.| Claranova vs. Linedata Services SA | Claranova vs. Interparfums SA | Claranova vs. Esker SA | Claranova vs. Neurones |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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