Correlation Between Claranova and GECI International
Can any of the company-specific risk be diversified away by investing in both Claranova and GECI International 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 GECI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and GECI International SA, you can compare the effects of market volatilities on Claranova and GECI International 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 GECI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and GECI International.
Diversification Opportunities for Claranova and GECI International
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Claranova and GECI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and GECI International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GECI International 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 GECI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GECI International has no effect on the direction of Claranova i.e., Claranova and GECI International go up and down completely randomly.
Pair Corralation between Claranova and GECI International
Assuming the 90 days trading horizon Claranova SE is expected to generate 0.83 times more return on investment than GECI International. However, Claranova SE is 1.21 times less risky than GECI International. It trades about 0.04 of its potential returns per unit of risk. GECI International SA is currently generating about -0.38 per unit of risk. If you would invest 138.00 in Claranova SE on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Claranova SE or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Claranova SE vs. GECI International SA
Performance |
| Timeline |
| Claranova SE |
| GECI International |
Claranova and GECI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and GECI International
The main advantage of trading using opposite Claranova and GECI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, GECI International 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 GECI International will offset losses from the drop in GECI International's long position.| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
| GECI International vs. Europlasma SA | GECI International vs. Archos | GECI International vs. DBT SA | GECI International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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