Correlation Between Edenred SA and Prodways Group
Can any of the company-specific risk be diversified away by investing in both Edenred SA and Prodways 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 Edenred SA and Prodways Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edenred SA and Prodways Group SA, you can compare the effects of market volatilities on Edenred SA and Prodways 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 Edenred SA with a short position of Prodways Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edenred SA and Prodways Group.
Diversification Opportunities for Edenred SA and Prodways Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edenred and Prodways is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Edenred SA and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA 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 Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of Edenred SA i.e., Edenred SA and Prodways Group go up and down completely randomly.
Pair Corralation between Edenred SA and Prodways Group
Assuming the 90 days trading horizon Edenred SA is expected to generate 1.29 times more return on investment than Prodways Group. However, Edenred SA is 1.29 times more volatile than Prodways Group SA. It trades about 0.05 of its potential returns per unit of risk. Prodways Group SA is currently generating about -0.19 per unit of risk. If you would invest 2,955 in Edenred SA on August 29, 2024 and sell it today you would earn a total of 51.00 from holding Edenred SA or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edenred SA vs. Prodways Group SA
Performance |
| Timeline |
| Edenred SA |
| Prodways Group SA |
Edenred SA and Prodways Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edenred SA and Prodways Group
The main advantage of trading using opposite Edenred SA and Prodways Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edenred SA position performs unexpectedly, Prodways 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 Prodways Group will offset losses from the drop in Prodways Group's long position.| Edenred SA vs. Prodways Group SA | Edenred SA vs. Claranova SE | Edenred SA vs. DBV Technologies SA | Edenred SA vs. Manitou BF SA |
| Prodways Group vs. Balyo SA | Prodways Group vs. Lumibird SA | Prodways Group vs. Chargeurs SA | Prodways Group vs. Figeac Aero 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |