Correlation Between Edenred SA and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Edenred SA and Derichebourg 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 Edenred SA and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edenred SA and Derichebourg, you can compare the effects of market volatilities on Edenred SA and Derichebourg 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 Edenred SA with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edenred SA and Derichebourg.
Diversification Opportunities for Edenred SA and Derichebourg
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Edenred and Derichebourg is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Edenred SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Edenred 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 Edenred SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Edenred SA i.e., Edenred SA and Derichebourg go up and down completely randomly.
Pair Corralation between Edenred SA and Derichebourg
Assuming the 90 days trading horizon Edenred SA is expected to under-perform the Derichebourg. But the stock apears to be less risky and, when comparing its historical volatility, Edenred SA is 1.17 times less risky than Derichebourg. The stock trades about -0.04 of its potential returns per unit of risk. The Derichebourg is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Derichebourg on September 2, 2024 and sell it today you would lose (42.00) from holding Derichebourg or give up 8.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edenred SA vs. Derichebourg
Performance |
| Timeline |
| Edenred SA |
| Derichebourg |
Edenred SA and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edenred SA and Derichebourg
The main advantage of trading using opposite Edenred SA and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edenred SA position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Edenred SA vs. Bureau Veritas SA | Edenred SA vs. Sodexo SA | Edenred SA vs. Legrand SA | Edenred SA vs. Accor S A |
| Derichebourg vs. Edenred SA | Derichebourg vs. Legrand SA | Derichebourg vs. Sodexo SA | Derichebourg vs. Wendel |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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