Correlation Between ACTEOS SA and Thales SA
Can any of the company-specific risk be diversified away by investing in both ACTEOS SA and Thales 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 ACTEOS SA and Thales SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACTEOS SA and Thales SA, you can compare the effects of market volatilities on ACTEOS SA and Thales 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 ACTEOS SA with a short position of Thales SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACTEOS SA and Thales SA.
Diversification Opportunities for ACTEOS SA and Thales SA
Good diversification
The 3 months correlation between ACTEOS and Thales is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding ACTEOS SA and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA and ACTEOS 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 ACTEOS SA are associated (or correlated) with Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of ACTEOS SA i.e., ACTEOS SA and Thales SA go up and down completely randomly.
Pair Corralation between ACTEOS SA and Thales SA
Assuming the 90 days trading horizon ACTEOS SA is expected to under-perform the Thales SA. In addition to that, ACTEOS SA is 1.39 times more volatile than Thales SA. It trades about -0.23 of its total potential returns per unit of risk. Thales SA is currently generating about -0.16 per unit of volatility. If you would invest 15,080 in Thales SA on August 30, 2024 and sell it today you would lose (1,080) from holding Thales SA or give up 7.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACTEOS SA vs. Thales SA
Performance |
| Timeline |
| ACTEOS SA |
| Thales SA |
ACTEOS SA and Thales SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACTEOS SA and Thales SA
The main advantage of trading using opposite ACTEOS SA and Thales SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACTEOS SA position performs unexpectedly, Thales 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 Thales SA will offset losses from the drop in Thales SA's long position.| ACTEOS SA vs. Thales SA | ACTEOS SA vs. Safran SA | ACTEOS SA vs. Air Liquide SA | ACTEOS SA vs. Capgemini SE |
| Thales SA vs. Safran SA | Thales SA vs. Dassault Systemes SE | Thales SA vs. Dassault Aviation SA | Thales SA vs. Vinci 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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