Correlation Between Covivio Hotels and Seche Environnem
Can any of the company-specific risk be diversified away by investing in both Covivio Hotels and Seche Environnem 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 Covivio Hotels and Seche Environnem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covivio Hotels and Seche Environnem, you can compare the effects of market volatilities on Covivio Hotels and Seche Environnem 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 Covivio Hotels with a short position of Seche Environnem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covivio Hotels and Seche Environnem.
Diversification Opportunities for Covivio Hotels and Seche Environnem
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Covivio and Seche is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Covivio Hotels and Seche Environnem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seche Environnem and Covivio Hotels 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 Covivio Hotels are associated (or correlated) with Seche Environnem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seche Environnem has no effect on the direction of Covivio Hotels i.e., Covivio Hotels and Seche Environnem go up and down completely randomly.
Pair Corralation between Covivio Hotels and Seche Environnem
Assuming the 90 days trading horizon Covivio Hotels is expected to generate 0.68 times more return on investment than Seche Environnem. However, Covivio Hotels is 1.47 times less risky than Seche Environnem. It trades about 0.11 of its potential returns per unit of risk. Seche Environnem is currently generating about -0.08 per unit of risk. If you would invest 1,545 in Covivio Hotels on September 1, 2024 and sell it today you would earn a total of 325.00 from holding Covivio Hotels or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covivio Hotels vs. Seche Environnem
Performance |
| Timeline |
| Covivio Hotels |
| Seche Environnem |
Covivio Hotels and Seche Environnem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covivio Hotels and Seche Environnem
The main advantage of trading using opposite Covivio Hotels and Seche Environnem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covivio Hotels position performs unexpectedly, Seche Environnem 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 Seche Environnem will offset losses from the drop in Seche Environnem's long position.| Covivio Hotels vs. Covivio SA | Covivio Hotels vs. Altarea SCA | Covivio Hotels vs. Carmila SA | Covivio Hotels vs. Icade SA |
| Seche Environnem vs. Derichebourg | Seche Environnem vs. High Co SA | Seche Environnem vs. Jacquet Metal Service |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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