Correlation Between Fnac Darty and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Fnac Darty and Derichebourg 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 Fnac Darty and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fnac Darty SA and Derichebourg, you can compare the effects of market volatilities on Fnac Darty and Derichebourg 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 Fnac Darty with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fnac Darty and Derichebourg.
Diversification Opportunities for Fnac Darty and Derichebourg
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fnac and Derichebourg is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Fnac Darty SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Fnac Darty 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 Fnac Darty SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Fnac Darty i.e., Fnac Darty and Derichebourg go up and down completely randomly.
Pair Corralation between Fnac Darty and Derichebourg
Assuming the 90 days trading horizon Fnac Darty SA is expected to under-perform the Derichebourg. In addition to that, Fnac Darty is 1.16 times more volatile than Derichebourg. It trades about -0.06 of its total potential returns per unit of risk. Derichebourg is currently generating about -0.03 per unit of volatility. If you would invest 513.00 in Derichebourg on September 1, 2024 and sell it today you would lose (56.00) from holding Derichebourg or give up 10.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Fnac Darty SA vs. Derichebourg
Performance |
| Timeline |
| Fnac Darty SA |
| Derichebourg |
Fnac Darty and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fnac Darty and Derichebourg
The main advantage of trading using opposite Fnac Darty and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fnac Darty position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Fnac Darty vs. Vente Unique | Fnac Darty vs. Groupe Sfpi | Fnac Darty vs. Cegedim SA | Fnac Darty vs. SA Catana Group |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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