Correlation Between Claranova and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Claranova and Derichebourg 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 Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Claranova SE and Derichebourg, you can compare the effects of market volatilities on Claranova and Derichebourg 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 Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Derichebourg.
Diversification Opportunities for Claranova and Derichebourg
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Claranova and Derichebourg is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg 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 Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Claranova i.e., Claranova and Derichebourg go up and down completely randomly.
Pair Corralation between Claranova and Derichebourg
Assuming the 90 days trading horizon Claranova SE is expected to generate 0.74 times more return on investment than Derichebourg. However, Claranova SE is 1.34 times less risky than Derichebourg. It trades about -0.05 of its potential returns per unit of risk. Derichebourg is currently generating about -0.19 per unit of risk. If you would invest 146.00 in Claranova SE on August 31, 2024 and sell it today you would lose (4.00) from holding Claranova SE or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Claranova SE vs. Derichebourg
Performance |
| Timeline |
| Claranova SE |
| Derichebourg |
Claranova and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Derichebourg
The main advantage of trading using opposite Claranova and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Claranova vs. Linedata Services SA | Claranova vs. Interparfums SA | Claranova vs. Esker SA | Claranova vs. Neurones |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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