Correlation Between Ipsen SA and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both Ipsen SA and PATTIES FOODS 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 Ipsen SA and PATTIES FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ipsen SA and PATTIES FOODS , you can compare the effects of market volatilities on Ipsen SA and PATTIES FOODS 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 Ipsen SA with a short position of PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ipsen SA and PATTIES FOODS.
Diversification Opportunities for Ipsen SA and PATTIES FOODS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ipsen and PATTIES is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ipsen SA and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES FOODS and Ipsen 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 Ipsen SA are associated (or correlated) with PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of Ipsen SA i.e., Ipsen SA and PATTIES FOODS go up and down completely randomly.
Pair Corralation between Ipsen SA and PATTIES FOODS
Assuming the 90 days horizon Ipsen SA is expected to generate 0.29 times more return on investment than PATTIES FOODS. However, Ipsen SA is 3.43 times less risky than PATTIES FOODS. It trades about 0.03 of its potential returns per unit of risk. PATTIES FOODS is currently generating about 0.0 per unit of risk. If you would invest 9,664 in Ipsen SA on October 25, 2024 and sell it today you would earn a total of 2,066 from holding Ipsen SA or generate 21.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ipsen SA vs. PATTIES FOODS
Performance |
| Timeline |
| Ipsen SA |
| PATTIES FOODS |
Ipsen SA and PATTIES FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ipsen SA and PATTIES FOODS
The main advantage of trading using opposite Ipsen SA and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipsen SA position performs unexpectedly, PATTIES FOODS 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS's long position.| Ipsen SA vs. SBM OFFSHORE | Ipsen SA vs. FLOW TRADERS LTD | Ipsen SA vs. GALENA MINING LTD | Ipsen SA vs. MCEWEN MINING INC |
| PATTIES FOODS vs. Heidelberg Materials AG | PATTIES FOODS vs. Rayonier Advanced Materials | PATTIES FOODS vs. TRADEDOUBLER AB SK | PATTIES FOODS vs. GOODYEAR T RUBBER |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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