Correlation Between Engie SA and AbL Diagnostics
Can any of the company-specific risk be diversified away by investing in both Engie SA and AbL Diagnostics 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 Engie SA and AbL Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engie SA and AbL Diagnostics SA, you can compare the effects of market volatilities on Engie SA and AbL Diagnostics 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 Engie SA with a short position of AbL Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie SA and AbL Diagnostics.
Diversification Opportunities for Engie SA and AbL Diagnostics
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Engie and AbL is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Engie SA and AbL Diagnostics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbL Diagnostics SA and Engie 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 Engie SA are associated (or correlated) with AbL Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbL Diagnostics SA has no effect on the direction of Engie SA i.e., Engie SA and AbL Diagnostics go up and down completely randomly.
Pair Corralation between Engie SA and AbL Diagnostics
Assuming the 90 days trading horizon Engie SA is expected to under-perform the AbL Diagnostics. In addition to that, Engie SA is 2.22 times more volatile than AbL Diagnostics SA. It trades about -0.13 of its total potential returns per unit of risk. AbL Diagnostics SA is currently generating about -0.15 per unit of volatility. If you would invest 290.00 in AbL Diagnostics SA on August 30, 2024 and sell it today you would lose (6.00) from holding AbL Diagnostics SA or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Engie SA vs. AbL Diagnostics SA
Performance |
| Timeline |
| Engie SA |
| AbL Diagnostics SA |
Engie SA and AbL Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engie SA and AbL Diagnostics
The main advantage of trading using opposite Engie SA and AbL Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie SA position performs unexpectedly, AbL Diagnostics 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 AbL Diagnostics will offset losses from the drop in AbL Diagnostics' long position.| Engie SA vs. Orange SA | Engie SA vs. Veolia Environnement VE | Engie SA vs. AXA SA | Engie SA vs. TotalEnergies SE |
| AbL Diagnostics vs. Axway Software | AbL Diagnostics vs. Reworld Media | AbL Diagnostics vs. Novatech Industries SA | AbL Diagnostics vs. Metalliance 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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