Correlation Between Claranova and Mersen SA
Can any of the company-specific risk be diversified away by investing in both Claranova and Mersen 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 Mersen 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 Mersen SA, you can compare the effects of market volatilities on Claranova and Mersen 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 Mersen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Mersen SA.
Diversification Opportunities for Claranova and Mersen SA
Very weak diversification
The 3 months correlation between Claranova and Mersen is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Mersen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mersen 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 Mersen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mersen SA has no effect on the direction of Claranova i.e., Claranova and Mersen SA go up and down completely randomly.
Pair Corralation between Claranova and Mersen SA
Assuming the 90 days trading horizon Claranova SE is expected to generate 0.91 times more return on investment than Mersen SA. However, Claranova SE is 1.1 times less risky than Mersen SA. It trades about -0.05 of its potential returns per unit of risk. Mersen SA is currently generating about -0.16 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Claranova SE vs. Mersen SA
Performance |
| Timeline |
| Claranova SE |
| Mersen SA |
Claranova and Mersen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Mersen SA
The main advantage of trading using opposite Claranova and Mersen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Mersen 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 Mersen SA will offset losses from the drop in Mersen SA's long position.| Claranova vs. Linedata Services SA | Claranova vs. Interparfums SA | Claranova vs. Esker SA | Claranova vs. Neurones |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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