Correlation Between Les Htels and Accor S
Can any of the company-specific risk be diversified away by investing in both Les Htels and Accor S 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 Les Htels and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Les Htels de and Accor S A, you can compare the effects of market volatilities on Les Htels and Accor S 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 Les Htels with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Htels and Accor S.
Diversification Opportunities for Les Htels and Accor S
Pay attention - limited upside
The 3 months correlation between Les and Accor is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Les Htels de and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Les Htels 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 Les Htels de are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Les Htels i.e., Les Htels and Accor S go up and down completely randomly.
Pair Corralation between Les Htels and Accor S
Assuming the 90 days trading horizon Les Htels de is expected to under-perform the Accor S. In addition to that, Les Htels is 4.28 times more volatile than Accor S A. It trades about -0.05 of its total potential returns per unit of risk. Accor S A is currently generating about 0.12 per unit of volatility. If you would invest 4,227 in Accor S A on August 28, 2024 and sell it today you would earn a total of 128.00 from holding Accor S A or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Les Htels de vs. Accor S A
Performance |
| Timeline |
| Les Htels de |
| Accor S A |
Les Htels and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Htels and Accor S
The main advantage of trading using opposite Les Htels and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Htels position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.| Les Htels vs. Bouygues SA | Les Htels vs. Capgemini SE | Les Htels vs. Carrefour SA | Les Htels vs. Pernod Ricard 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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