Correlation Between Derichebourg and Vicat SA
Can any of the company-specific risk be diversified away by investing in both Derichebourg and Vicat 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 Derichebourg and Vicat SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derichebourg and Vicat SA, you can compare the effects of market volatilities on Derichebourg and Vicat 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 Derichebourg with a short position of Vicat SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derichebourg and Vicat SA.
Diversification Opportunities for Derichebourg and Vicat SA
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Derichebourg and Vicat is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and Vicat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicat 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 Vicat SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicat SA has no effect on the direction of Derichebourg i.e., Derichebourg and Vicat SA go up and down completely randomly.
Pair Corralation between Derichebourg and Vicat SA
Assuming the 90 days trading horizon Derichebourg is expected to under-perform the Vicat SA. In addition to that, Derichebourg is 1.7 times more volatile than Vicat SA. It trades about -0.21 of its total potential returns per unit of risk. Vicat SA is currently generating about 0.15 per unit of volatility. If you would invest 3,405 in Vicat SA on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Vicat SA or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derichebourg vs. Vicat SA
Performance |
| Timeline |
| Derichebourg |
| Vicat SA |
Derichebourg and Vicat SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derichebourg and Vicat SA
The main advantage of trading using opposite Derichebourg and Vicat SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derichebourg position performs unexpectedly, Vicat 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 Vicat SA will offset losses from the drop in Vicat SA'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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