Correlation Between Caisse Regionale and Euronext
Can any of the company-specific risk be diversified away by investing in both Caisse Regionale and Euronext 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 Caisse Regionale and Euronext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caisse Regionale de and Euronext NV, you can compare the effects of market volatilities on Caisse Regionale and Euronext 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 Caisse Regionale with a short position of Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caisse Regionale and Euronext.
Diversification Opportunities for Caisse Regionale and Euronext
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caisse and Euronext is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Caisse Regionale de and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV and Caisse Regionale 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 Caisse Regionale de are associated (or correlated) with Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of Caisse Regionale i.e., Caisse Regionale and Euronext go up and down completely randomly.
Pair Corralation between Caisse Regionale and Euronext
Assuming the 90 days trading horizon Caisse Regionale de is expected to generate 0.67 times more return on investment than Euronext. However, Caisse Regionale de is 1.49 times less risky than Euronext. It trades about 0.28 of its potential returns per unit of risk. Euronext NV is currently generating about 0.04 per unit of risk. If you would invest 5,645 in Caisse Regionale de on August 27, 2024 and sell it today you would earn a total of 354.00 from holding Caisse Regionale de or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caisse Regionale de vs. Euronext NV
Performance |
| Timeline |
| Caisse Regionale |
| Euronext NV |
Caisse Regionale and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caisse Regionale and Euronext
The main advantage of trading using opposite Caisse Regionale and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caisse Regionale position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext's long position.The idea behind Caisse Regionale de and Euronext NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Euronext vs. Caisse rgionale de | Euronext vs. Caisse Regionale de | Euronext vs. Manitou BF SA | Euronext vs. Ossiam Minimum Variance |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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