Correlation Between Financiere Marjos and Icade SA
Can any of the company-specific risk be diversified away by investing in both Financiere Marjos and Icade 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 Financiere Marjos and Icade SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financiere Marjos SA and Icade SA, you can compare the effects of market volatilities on Financiere Marjos and Icade 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 Financiere Marjos with a short position of Icade SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financiere Marjos and Icade SA.
Diversification Opportunities for Financiere Marjos and Icade SA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Financiere and Icade is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Financiere Marjos SA and Icade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icade SA and Financiere Marjos 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 Financiere Marjos SA are associated (or correlated) with Icade SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icade SA has no effect on the direction of Financiere Marjos i.e., Financiere Marjos and Icade SA go up and down completely randomly.
Pair Corralation between Financiere Marjos and Icade SA
Assuming the 90 days trading horizon Financiere Marjos SA is expected to generate 3.35 times more return on investment than Icade SA. However, Financiere Marjos is 3.35 times more volatile than Icade SA. It trades about 0.47 of its potential returns per unit of risk. Icade SA is currently generating about -0.29 per unit of risk. If you would invest 6.50 in Financiere Marjos SA on August 27, 2024 and sell it today you would earn a total of 4.50 from holding Financiere Marjos SA or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financiere Marjos SA vs. Icade SA
Performance |
| Timeline |
| Financiere Marjos |
| Icade SA |
Financiere Marjos and Icade SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financiere Marjos and Icade SA
The main advantage of trading using opposite Financiere Marjos and Icade SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financiere Marjos position performs unexpectedly, Icade 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 Icade SA will offset losses from the drop in Icade SA's long position.| Financiere Marjos vs. SA Catana Group | Financiere Marjos vs. Reworld Media | Financiere Marjos vs. Biosynex | Financiere Marjos vs. Moulinvest |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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