Correlation Between Celyad SA and Elia Group
Can any of the company-specific risk be diversified away by investing in both Celyad SA and Elia Group 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 Celyad SA and Elia Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celyad SA and Elia Group SANV, you can compare the effects of market volatilities on Celyad SA and Elia Group 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 Celyad SA with a short position of Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celyad SA and Elia Group.
Diversification Opportunities for Celyad SA and Elia Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Celyad and Elia is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Celyad SA and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV and Celyad SA 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 Celyad SA are associated (or correlated) with Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Celyad SA i.e., Celyad SA and Elia Group go up and down completely randomly.
Pair Corralation between Celyad SA and Elia Group
Assuming the 90 days trading horizon Celyad SA is expected to generate 5.7 times more return on investment than Elia Group. However, Celyad SA is 5.7 times more volatile than Elia Group SANV. It trades about 0.08 of its potential returns per unit of risk. Elia Group SANV is currently generating about -0.04 per unit of risk. If you would invest 36.00 in Celyad SA on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Celyad SA or generate 102.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celyad SA vs. Elia Group SANV
Performance |
| Timeline |
| Celyad SA |
| Elia Group SANV |
Celyad SA and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celyad SA and Elia Group
The main advantage of trading using opposite Celyad SA and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celyad SA position performs unexpectedly, Elia Group 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 Elia Group will offset losses from the drop in Elia Group's long position.| Celyad SA vs. Retail Estates | Celyad SA vs. Shurgard Self Storage | Celyad SA vs. Onward Medical NV | Celyad SA vs. Vastned Retail Belgium |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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