Correlation Between European Metals and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both European Metals and Vivendi 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 European Metals and Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Vivendi SA, you can compare the effects of market volatilities on European Metals and Vivendi 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 European Metals with a short position of Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Vivendi SA.
Diversification Opportunities for European Metals and Vivendi SA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between European and Vivendi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA and European Metals 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 European Metals Holdings are associated (or correlated) with Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of European Metals i.e., European Metals and Vivendi SA go up and down completely randomly.
Pair Corralation between European Metals and Vivendi SA
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Vivendi SA. In addition to that, European Metals is 1.23 times more volatile than Vivendi SA. It trades about -0.22 of its total potential returns per unit of risk. Vivendi SA is currently generating about -0.17 per unit of volatility. If you would invest 914.00 in Vivendi SA on September 13, 2024 and sell it today you would lose (54.00) from holding Vivendi SA or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
European Metals Holdings vs. Vivendi SA
Performance |
| Timeline |
| European Metals Holdings |
| Vivendi SA |
European Metals and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Vivendi SA
The main advantage of trading using opposite European Metals and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Vivendi 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Ferrexpo PLC | European Metals vs. Atalaya Mining |
| Vivendi SA vs. Lowland Investment Co | Vivendi SA vs. Southwest Airlines Co | Vivendi SA vs. Taylor Maritime Investments | Vivendi SA vs. Schroders Investment Trusts |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |