Correlation Between Eutelsat Communications and Television Francaise
Can any of the company-specific risk be diversified away by investing in both Eutelsat Communications and Television Francaise 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 Television Francaise 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 Television Francaise 1, you can compare the effects of market volatilities on Eutelsat Communications and Television Francaise 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 Television Francaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat Communications and Television Francaise.
Diversification Opportunities for Eutelsat Communications and Television Francaise
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eutelsat and Television is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Communications SA and Television Francaise 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Television Francaise 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 Television Francaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Television Francaise has no effect on the direction of Eutelsat Communications i.e., Eutelsat Communications and Television Francaise go up and down completely randomly.
Pair Corralation between Eutelsat Communications and Television Francaise
Assuming the 90 days trading horizon Eutelsat Communications SA is expected to under-perform the Television Francaise. In addition to that, Eutelsat Communications is 2.23 times more volatile than Television Francaise 1. It trades about -0.47 of its total potential returns per unit of risk. Television Francaise 1 is currently generating about -0.18 per unit of volatility. If you would invest 760.00 in Television Francaise 1 on September 1, 2024 and sell it today you would lose (36.00) from holding Television Francaise 1 or give up 4.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eutelsat Communications SA vs. Television Francaise 1
Performance |
| Timeline |
| Eutelsat Communications |
| Television Francaise |
Eutelsat Communications and Television Francaise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eutelsat Communications and Television Francaise
The main advantage of trading using opposite Eutelsat Communications and Television Francaise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat Communications position performs unexpectedly, Television Francaise 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 Television Francaise will offset losses from the drop in Television Francaise's long position.| Eutelsat Communications vs. SES S A | Eutelsat Communications vs. Rubis SCA | Eutelsat Communications vs. Coface SA | Eutelsat Communications vs. SCOR SE |
| Television Francaise vs. Mtropole Tlvision SA | Television Francaise vs. Lagardere SCA | Television Francaise vs. Bouygues SA | Television Francaise vs. Publicis Groupe 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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