Correlation Between Les Htels and Groupe JAJ
Can any of the company-specific risk be diversified away by investing in both Les Htels and Groupe JAJ 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 Groupe JAJ 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 Groupe JAJ, you can compare the effects of market volatilities on Les Htels and Groupe JAJ 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 Groupe JAJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Les Htels and Groupe JAJ.
Diversification Opportunities for Les Htels and Groupe JAJ
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Les and Groupe is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Les Htels de and Groupe JAJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe JAJ 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 Groupe JAJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe JAJ has no effect on the direction of Les Htels i.e., Les Htels and Groupe JAJ go up and down completely randomly.
Pair Corralation between Les Htels and Groupe JAJ
Assuming the 90 days trading horizon Les Htels de is expected to generate 1.2 times more return on investment than Groupe JAJ. However, Les Htels is 1.2 times more volatile than Groupe JAJ. It trades about 0.03 of its potential returns per unit of risk. Groupe JAJ is currently generating about -0.03 per unit of risk. If you would invest 126.00 in Les Htels de on August 31, 2024 and sell it today you would lose (6.00) from holding Les Htels de or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Les Htels de vs. Groupe JAJ
Performance |
| Timeline |
| Les Htels de |
| Groupe JAJ |
Les Htels and Groupe JAJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Les Htels and Groupe JAJ
The main advantage of trading using opposite Les Htels and Groupe JAJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Les Htels position performs unexpectedly, Groupe JAJ 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 Groupe JAJ will offset losses from the drop in Groupe JAJ's long position.| Les Htels vs. Les Hotels Bav | Les Htels vs. Groupe Partouche SA | Les Htels vs. Centrale dAchat Franaise | Les Htels vs. Manitou BF SA |
| Groupe JAJ vs. Centrale dAchat Franaise | Groupe JAJ vs. Les Htels de | Groupe JAJ vs. ST Dupont | Groupe JAJ vs. Barbara Bui 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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