Correlation Between Claranova and Stef SA
Can any of the company-specific risk be diversified away by investing in both Claranova and Stef 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 Stef 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 Stef SA, you can compare the effects of market volatilities on Claranova and Stef 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 Stef SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Claranova and Stef SA.
Diversification Opportunities for Claranova and Stef SA
Good diversification
The 3 months correlation between Claranova and Stef is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Claranova SE and Stef SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stef 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 Stef SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stef SA has no effect on the direction of Claranova i.e., Claranova and Stef SA go up and down completely randomly.
Pair Corralation between Claranova and Stef SA
Assuming the 90 days trading horizon Claranova SE is expected to generate 2.12 times more return on investment than Stef SA. However, Claranova is 2.12 times more volatile than Stef SA. It trades about 0.1 of its potential returns per unit of risk. Stef SA is currently generating about -0.24 per unit of risk. If you would invest 141.00 in Claranova SE on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Claranova SE or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Claranova SE vs. Stef SA
Performance |
| Timeline |
| Claranova SE |
| Stef SA |
Claranova and Stef SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Claranova and Stef SA
The main advantage of trading using opposite Claranova and Stef SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Claranova position performs unexpectedly, Stef 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 Stef SA will offset losses from the drop in Stef SA's long position.| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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