Correlation Between Les Htels and Bernard Loisea
Can any of the company-specific risk be diversified away by investing in both Les Htels and Bernard Loisea 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 Bernard Loisea 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 Bernard Loisea, you can compare the effects of market volatilities on Les Htels and Bernard Loisea 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 Bernard Loisea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Htels and Bernard Loisea.
Diversification Opportunities for Les Htels and Bernard Loisea
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Les and Bernard is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Les Htels de and Bernard Loisea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bernard Loisea 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 Bernard Loisea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bernard Loisea has no effect on the direction of Les Htels i.e., Les Htels and Bernard Loisea go up and down completely randomly.
Pair Corralation between Les Htels and Bernard Loisea
Assuming the 90 days trading horizon Les Htels de is expected to generate 1.88 times more return on investment than Bernard Loisea. However, Les Htels is 1.88 times more volatile than Bernard Loisea. It trades about -0.03 of its potential returns per unit of risk. Bernard Loisea is currently generating about -0.08 per unit of risk. If you would invest 142.00 in Les Htels de on September 1, 2024 and sell it today you would lose (13.00) from holding Les Htels de or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Les Htels de vs. Bernard Loisea
Performance |
| Timeline |
| Les Htels de |
| Bernard Loisea |
Les Htels and Bernard Loisea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Htels and Bernard Loisea
The main advantage of trading using opposite Les Htels and Bernard Loisea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Htels position performs unexpectedly, Bernard Loisea 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 Bernard Loisea will offset losses from the drop in Bernard Loisea's long position.The idea behind Les Htels de and Bernard Loisea 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.| Bernard Loisea vs. Les Htels de | Bernard Loisea vs. Entreparticuli | Bernard Loisea vs. Les Hotels Bav | Bernard Loisea vs. GEA Grenobl Elect |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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