Correlation Between Fonciere Lyonnaise and Gecina SA
Can any of the company-specific risk be diversified away by investing in both Fonciere Lyonnaise and Gecina 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 Fonciere Lyonnaise and Gecina SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fonciere Lyonnaise and Gecina SA, you can compare the effects of market volatilities on Fonciere Lyonnaise and Gecina 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 Fonciere Lyonnaise with a short position of Gecina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fonciere Lyonnaise and Gecina SA.
Diversification Opportunities for Fonciere Lyonnaise and Gecina SA
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fonciere and Gecina is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fonciere Lyonnaise and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Fonciere Lyonnaise 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 Fonciere Lyonnaise are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Fonciere Lyonnaise i.e., Fonciere Lyonnaise and Gecina SA go up and down completely randomly.
Pair Corralation between Fonciere Lyonnaise and Gecina SA
Assuming the 90 days trading horizon Fonciere Lyonnaise is expected to under-perform the Gecina SA. But the stock apears to be less risky and, when comparing its historical volatility, Fonciere Lyonnaise is 1.16 times less risky than Gecina SA. The stock trades about 0.0 of its potential returns per unit of risk. The Gecina SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,526 in Gecina SA on August 28, 2024 and sell it today you would earn a total of 949.00 from holding Gecina SA or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fonciere Lyonnaise vs. Gecina SA
Performance |
| Timeline |
| Fonciere Lyonnaise |
| Gecina SA |
Fonciere Lyonnaise and Gecina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fonciere Lyonnaise and Gecina SA
The main advantage of trading using opposite Fonciere Lyonnaise and Gecina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fonciere Lyonnaise position performs unexpectedly, Gecina 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 Gecina SA will offset losses from the drop in Gecina SA's long position.| Fonciere Lyonnaise vs. Gecina SA | Fonciere Lyonnaise vs. Icade SA | Fonciere Lyonnaise vs. Altarea SCA | Fonciere Lyonnaise vs. Mercialys 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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