Correlation Between Gecina SA and Acanthe Dveloppement
Can any of the company-specific risk be diversified away by investing in both Gecina SA and Acanthe Dveloppement 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 Gecina SA and Acanthe Dveloppement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gecina SA and Acanthe Dveloppement, you can compare the effects of market volatilities on Gecina SA and Acanthe Dveloppement 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 Gecina SA with a short position of Acanthe Dveloppement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gecina SA and Acanthe Dveloppement.
Diversification Opportunities for Gecina SA and Acanthe Dveloppement
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gecina and Acanthe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Gecina SA and Acanthe Dveloppement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acanthe Dveloppement and Gecina SA 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 Gecina SA are associated (or correlated) with Acanthe Dveloppement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acanthe Dveloppement has no effect on the direction of Gecina SA i.e., Gecina SA and Acanthe Dveloppement go up and down completely randomly.
Pair Corralation between Gecina SA and Acanthe Dveloppement
Assuming the 90 days trading horizon Gecina SA is expected to under-perform the Acanthe Dveloppement. But the stock apears to be less risky and, when comparing its historical volatility, Gecina SA is 1.69 times less risky than Acanthe Dveloppement. The stock trades about -0.28 of its potential returns per unit of risk. The Acanthe Dveloppement is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 35.00 in Acanthe Dveloppement on August 28, 2024 and sell it today you would lose (2.00) from holding Acanthe Dveloppement or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gecina SA vs. Acanthe Dveloppement
Performance |
| Timeline |
| Gecina SA |
| Acanthe Dveloppement |
Gecina SA and Acanthe Dveloppement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gecina SA and Acanthe Dveloppement
The main advantage of trading using opposite Gecina SA and Acanthe Dveloppement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gecina SA position performs unexpectedly, Acanthe Dveloppement 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 Acanthe Dveloppement will offset losses from the drop in Acanthe Dveloppement's long position.The idea behind Gecina SA and Acanthe Dveloppement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Acanthe Dveloppement vs. Gecina SA | Acanthe Dveloppement vs. Icade SA | Acanthe Dveloppement vs. Altarea SCA | Acanthe Dveloppement 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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