Correlation Between Derichebourg and Assystem
Can any of the company-specific risk be diversified away by investing in both Derichebourg and Assystem 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 Derichebourg and Assystem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derichebourg and Assystem SA, you can compare the effects of market volatilities on Derichebourg and Assystem 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 Derichebourg with a short position of Assystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derichebourg and Assystem.
Diversification Opportunities for Derichebourg and Assystem
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Derichebourg and Assystem is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and Derichebourg 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 Derichebourg are associated (or correlated) with Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of Derichebourg i.e., Derichebourg and Assystem go up and down completely randomly.
Pair Corralation between Derichebourg and Assystem
Assuming the 90 days trading horizon Derichebourg is expected to under-perform the Assystem. In addition to that, Derichebourg is 1.11 times more volatile than Assystem SA. It trades about 0.0 of its total potential returns per unit of risk. Assystem SA is currently generating about 0.02 per unit of volatility. If you would invest 3,306 in Assystem SA on August 30, 2024 and sell it today you would earn a total of 374.00 from holding Assystem SA or generate 11.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derichebourg vs. Assystem SA
Performance |
| Timeline |
| Derichebourg |
| Assystem SA |
Derichebourg and Assystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derichebourg and Assystem
The main advantage of trading using opposite Derichebourg and Assystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derichebourg position performs unexpectedly, Assystem 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 Assystem will offset losses from the drop in Assystem's long position.| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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