Correlation Between Claranova and Groupe LDLC
Can any of the company-specific risk be diversified away by investing in both Claranova and Groupe LDLC 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 Groupe LDLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and Groupe LDLC SA, you can compare the effects of market volatilities on Claranova and Groupe LDLC 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 Groupe LDLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Groupe LDLC.
Diversification Opportunities for Claranova and Groupe LDLC
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Claranova and Groupe is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Groupe LDLC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe LDLC SA 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 Groupe LDLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe LDLC SA has no effect on the direction of Claranova i.e., Claranova and Groupe LDLC go up and down completely randomly.
Pair Corralation between Claranova and Groupe LDLC
Assuming the 90 days trading horizon Claranova SE is expected to generate 0.97 times more return on investment than Groupe LDLC. However, Claranova SE is 1.03 times less risky than Groupe LDLC. It trades about -0.09 of its potential returns per unit of risk. Groupe LDLC SA is currently generating about -0.1 per unit of risk. If you would invest 220.00 in Claranova SE on September 1, 2024 and sell it today you would lose (73.00) from holding Claranova SE or give up 33.18% 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. Groupe LDLC SA
Performance |
| Timeline |
| Claranova SE |
| Groupe LDLC SA |
Claranova and Groupe LDLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Groupe LDLC
The main advantage of trading using opposite Claranova and Groupe LDLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Groupe LDLC 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 Groupe LDLC will offset losses from the drop in Groupe LDLC's long position.| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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