Correlation Between Eutelsat Communications and Hoteles Bestprice
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Hoteles Bestprice 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 Eutelsat Communications and Hoteles Bestprice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eutelsat Communications SA and Hoteles Bestprice SA, you can compare the effects of market volatilities on Eutelsat Communications and Hoteles Bestprice 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 Eutelsat Communications with a short position of Hoteles Bestprice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Hoteles Bestprice.
Diversification Opportunities for Eutelsat Communications and Hoteles Bestprice
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eutelsat and Hoteles is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Hoteles Bestprice SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles Bestprice and Eutelsat Communications 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 Eutelsat Communications SA are associated (or correlated) with Hoteles Bestprice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles Bestprice has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Hoteles Bestprice go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Hoteles Bestprice
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Hoteles Bestprice. In addition to that, Eutelsat Communications is 1.48 times more volatile than Hoteles Bestprice SA. It trades about -0.14 of its total potential returns per unit of risk. Hoteles Bestprice SA is currently generating about -0.14 per unit of volatility. If you would invest 410.00 in Hoteles Bestprice SA on September 1, 2024 and sell it today you would lose (110.00) from holding Hoteles Bestprice SA or give up 26.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Hoteles Bestprice SA
Performance |
| Timeline |
| Eutelsat Communications |
| Hoteles Bestprice |
Eutelsat Communications and Hoteles Bestprice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Hoteles Bestprice
The main advantage of trading using opposite Eutelsat Communications and Hoteles Bestprice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Hoteles Bestprice 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 Hoteles Bestprice will offset losses from the drop in Hoteles Bestprice's long position.| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
| Hoteles Bestprice vs. Les Hotels Bav | Hoteles Bestprice vs. Groupe Partouche SA | Hoteles Bestprice vs. Centrale dAchat Franaise | Hoteles Bestprice vs. Manitou BF 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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