Correlation Between Claranova and Coface SA
Can any of the company-specific risk be diversified away by investing in both Claranova and Coface SA 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 Coface SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and Coface SA, you can compare the effects of market volatilities on Claranova and Coface SA 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 Coface SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Coface SA.
Diversification Opportunities for Claranova and Coface SA
Weak diversification
The 3 months correlation between Claranova and Coface is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Coface SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coface 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 Coface SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coface SA has no effect on the direction of Claranova i.e., Claranova and Coface SA go up and down completely randomly.
Pair Corralation between Claranova and Coface SA
Assuming the 90 days trading horizon Claranova is expected to generate 1.19 times less return on investment than Coface SA. In addition to that, Claranova is 2.5 times more volatile than Coface SA. It trades about 0.16 of its total potential returns per unit of risk. Coface SA is currently generating about 0.48 per unit of volatility. If you would invest 1,413 in Coface SA on October 25, 2024 and sell it today you would earn a total of 122.00 from holding Coface SA or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Claranova SE vs. Coface SA
Performance |
| Timeline |
| Claranova SE |
| Coface SA |
Claranova and Coface SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Coface SA
The main advantage of trading using opposite Claranova and Coface SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Coface SA 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 Coface SA will offset losses from the drop in Coface SA's long position.| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group SA |
| Coface SA vs. Nexity | Coface SA vs. SCOR SE | Coface SA vs. Eutelsat Communications SA | Coface SA vs. Rubis SCA |
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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