Correlation Between Claranova and Invibes Advertising
Can any of the company-specific risk be diversified away by investing in both Claranova and Invibes Advertising 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 Invibes Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and Invibes Advertising NV, you can compare the effects of market volatilities on Claranova and Invibes Advertising 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 Invibes Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Invibes Advertising.
Diversification Opportunities for Claranova and Invibes Advertising
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Claranova and Invibes is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Invibes Advertising NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invibes Advertising 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 Invibes Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invibes Advertising has no effect on the direction of Claranova i.e., Claranova and Invibes Advertising go up and down completely randomly.
Pair Corralation between Claranova and Invibes Advertising
Assuming the 90 days trading horizon Claranova SE is expected to generate 0.84 times more return on investment than Invibes Advertising. However, Claranova SE is 1.19 times less risky than Invibes Advertising. It trades about -0.02 of its potential returns per unit of risk. Invibes Advertising NV is currently generating about -0.04 per unit of risk. If you would invest 281.00 in Claranova SE on August 30, 2024 and sell it today you would lose (136.00) from holding Claranova SE or give up 48.4% 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. Invibes Advertising NV
Performance |
| Timeline |
| Claranova SE |
| Invibes Advertising |
Claranova and Invibes Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Invibes Advertising
The main advantage of trading using opposite Claranova and Invibes Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Invibes Advertising 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 Invibes Advertising will offset losses from the drop in Invibes Advertising's long position.| Claranova vs. Sword Group SE | Claranova vs. Neurones | Claranova vs. Aubay Socit Anonyme | Claranova vs. Groupe CRIT SA |
| Invibes Advertising vs. Grolleau SAS | Invibes Advertising vs. Hydrogene De France | Invibes Advertising vs. Trigano SA | Invibes Advertising 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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