Correlation Between JC Decaux and SES S
Can any of the company-specific risk be diversified away by investing in both JC Decaux and SES S 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 JC Decaux and SES S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JC Decaux SA and SES S A, you can compare the effects of market volatilities on JC Decaux and SES S 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 JC Decaux with a short position of SES S. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Decaux and SES S.
Diversification Opportunities for JC Decaux and SES S
Very poor diversification
The 3 months correlation between DEC and SES is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JC Decaux SA and SES S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES S A and JC Decaux 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 JC Decaux SA are associated (or correlated) with SES S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES S A has no effect on the direction of JC Decaux i.e., JC Decaux and SES S go up and down completely randomly.
Pair Corralation between JC Decaux and SES S
Assuming the 90 days trading horizon JC Decaux SA is expected to generate 0.98 times more return on investment than SES S. However, JC Decaux SA is 1.02 times less risky than SES S. It trades about -0.02 of its potential returns per unit of risk. SES S A is currently generating about -0.02 per unit of risk. If you would invest 1,881 in JC Decaux SA on September 12, 2024 and sell it today you would lose (365.00) from holding JC Decaux SA or give up 19.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JC Decaux SA vs. SES S A
Performance |
| Timeline |
| JC Decaux SA |
| SES S A |
JC Decaux and SES S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JC Decaux and SES S
The main advantage of trading using opposite JC Decaux and SES S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Decaux position performs unexpectedly, SES S 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 SES S will offset losses from the drop in SES S's long position.| JC Decaux vs. Publicis Groupe SA | JC Decaux vs. Lagardere SCA | JC Decaux vs. Sodexo SA | JC Decaux vs. Imerys SA |
| SES S vs. Mtropole Tlvision SA | SES S vs. Lagardere SCA | SES S vs. Bouygues SA | SES S vs. Publicis Groupe SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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