Correlation Between First and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both First and Veolia Environnement 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 First and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Class Metals and Veolia Environnement VE, you can compare the effects of market volatilities on First and Veolia Environnement 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 First with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of First and Veolia Environnement.
Diversification Opportunities for First and Veolia Environnement
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Veolia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding First Class Metals and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and First 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 First Class Metals are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of First i.e., First and Veolia Environnement go up and down completely randomly.
Pair Corralation between First and Veolia Environnement
Assuming the 90 days trading horizon First Class Metals is expected to under-perform the Veolia Environnement. In addition to that, First is 4.06 times more volatile than Veolia Environnement VE. It trades about -0.07 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about 0.02 per unit of volatility. If you would invest 2,438 in Veolia Environnement VE on October 11, 2024 and sell it today you would earn a total of 258.00 from holding Veolia Environnement VE or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Class Metals vs. Veolia Environnement VE
Performance |
| Timeline |
| First Class Metals |
| Veolia Environnement |
First and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First and Veolia Environnement
The main advantage of trading using opposite First and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| First vs. Silvercorp Metals | First vs. Cornish Metals | First vs. Central Asia Metals | First vs. Mineral Financial Investments |
| Veolia Environnement vs. Eastinco Mining Exploration | Veolia Environnement vs. Tetragon Financial Group | Veolia Environnement vs. Griffin Mining | Veolia Environnement vs. Lundin Mining Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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