Correlation Between Chargeurs and Aurea SA
Can any of the company-specific risk be diversified away by investing in both Chargeurs and Aurea 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 Chargeurs and Aurea SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chargeurs SA and Aurea SA, you can compare the effects of market volatilities on Chargeurs and Aurea 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 Chargeurs with a short position of Aurea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chargeurs and Aurea SA.
Diversification Opportunities for Chargeurs and Aurea SA
Pay attention - limited upside
The 3 months correlation between Chargeurs and Aurea is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and Aurea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurea 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 Aurea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurea SA has no effect on the direction of Chargeurs i.e., Chargeurs and Aurea SA go up and down completely randomly.
Pair Corralation between Chargeurs and Aurea SA
Assuming the 90 days trading horizon Chargeurs SA is expected to generate 0.99 times more return on investment than Aurea SA. However, Chargeurs SA is 1.01 times less risky than Aurea SA. It trades about -0.01 of its potential returns per unit of risk. Aurea SA is currently generating about -0.01 per unit of risk. If you would invest 1,253 in Chargeurs SA on September 3, 2024 and sell it today you would lose (273.00) from holding Chargeurs SA or give up 21.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chargeurs SA vs. Aurea SA
Performance |
| Timeline |
| Chargeurs SA |
| Aurea SA |
Chargeurs and Aurea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chargeurs and Aurea SA
The main advantage of trading using opposite Chargeurs and Aurea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chargeurs position performs unexpectedly, Aurea 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 Aurea SA will offset losses from the drop in Aurea SA's long position.| Chargeurs vs. Derichebourg | Chargeurs vs. Trigano SA | Chargeurs vs. Rubis SCA | Chargeurs vs. BigBen Interactive |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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