Correlation Between Chargeurs and ABC Arbitrage
Can any of the company-specific risk be diversified away by investing in both Chargeurs and ABC Arbitrage 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 Chargeurs and ABC Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chargeurs SA and ABC arbitrage SA, you can compare the effects of market volatilities on Chargeurs and ABC Arbitrage 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 Chargeurs with a short position of ABC Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chargeurs and ABC Arbitrage.
Diversification Opportunities for Chargeurs and ABC Arbitrage
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chargeurs and ABC is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and ABC arbitrage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABC arbitrage SA and Chargeurs 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 Chargeurs SA are associated (or correlated) with ABC Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABC arbitrage SA has no effect on the direction of Chargeurs i.e., Chargeurs and ABC Arbitrage go up and down completely randomly.
Pair Corralation between Chargeurs and ABC Arbitrage
Assuming the 90 days trading horizon Chargeurs SA is expected to generate 1.39 times more return on investment than ABC Arbitrage. However, Chargeurs is 1.39 times more volatile than ABC arbitrage SA. It trades about 0.15 of its potential returns per unit of risk. ABC arbitrage SA is currently generating about -0.03 per unit of risk. If you would invest 925.00 in Chargeurs SA on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Chargeurs SA or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chargeurs SA vs. ABC arbitrage SA
Performance |
| Timeline |
| Chargeurs SA |
| ABC arbitrage SA |
Chargeurs and ABC Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chargeurs and ABC Arbitrage
The main advantage of trading using opposite Chargeurs and ABC Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs position performs unexpectedly, ABC Arbitrage 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 ABC Arbitrage will offset losses from the drop in ABC Arbitrage's long position.| Chargeurs vs. Derichebourg | Chargeurs vs. Trigano SA | Chargeurs vs. Rubis SCA | Chargeurs vs. BigBen Interactive |
| ABC Arbitrage vs. CBO Territoria SA | ABC Arbitrage vs. Rubis SCA | ABC Arbitrage vs. Nexity | ABC Arbitrage vs. Gaztransport Technigaz SAS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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