Correlation Between Elior SCA and Edenred SA
Can any of the company-specific risk be diversified away by investing in both Elior SCA and Edenred 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 Elior SCA and Edenred SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elior SCA and Edenred SA, you can compare the effects of market volatilities on Elior SCA and Edenred 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 Elior SCA with a short position of Edenred SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elior SCA and Edenred SA.
Diversification Opportunities for Elior SCA and Edenred SA
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Elior and Edenred is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Elior SCA and Edenred SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edenred SA and Elior SCA 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 Elior SCA are associated (or correlated) with Edenred SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edenred SA has no effect on the direction of Elior SCA i.e., Elior SCA and Edenred SA go up and down completely randomly.
Pair Corralation between Elior SCA and Edenred SA
Assuming the 90 days trading horizon Elior SCA is expected to under-perform the Edenred SA. In addition to that, Elior SCA is 3.8 times more volatile than Edenred SA. It trades about -0.31 of its total potential returns per unit of risk. Edenred SA is currently generating about 0.17 per unit of volatility. If you would invest 2,955 in Edenred SA on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Edenred SA or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elior SCA vs. Edenred SA
Performance |
| Timeline |
| Elior SCA |
| Edenred SA |
Elior SCA and Edenred SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elior SCA and Edenred SA
The main advantage of trading using opposite Elior SCA and Edenred SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elior SCA position performs unexpectedly, Edenred 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 Edenred SA will offset losses from the drop in Edenred SA's long position.| Elior SCA vs. Gaztransport Technigaz SAS | Elior SCA vs. Covivio Hotels | Elior SCA vs. Onlineformapro SA | Elior SCA vs. Broadpeak SA |
| Edenred SA vs. Bureau Veritas SA | Edenred SA vs. Sodexo SA | Edenred SA vs. Legrand SA | Edenred SA vs. Accor S A |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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