Correlation Between Icade SA and Fonciere Lyonnaise
Can any of the company-specific risk be diversified away by investing in both Icade SA and Fonciere Lyonnaise 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 Icade SA and Fonciere Lyonnaise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icade SA and Fonciere Lyonnaise, you can compare the effects of market volatilities on Icade SA and Fonciere Lyonnaise 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 Icade SA with a short position of Fonciere Lyonnaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icade SA and Fonciere Lyonnaise.
Diversification Opportunities for Icade SA and Fonciere Lyonnaise
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Icade and Fonciere is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Icade SA and Fonciere Lyonnaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonciere Lyonnaise and Icade 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 Icade SA are associated (or correlated) with Fonciere Lyonnaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonciere Lyonnaise has no effect on the direction of Icade SA i.e., Icade SA and Fonciere Lyonnaise go up and down completely randomly.
Pair Corralation between Icade SA and Fonciere Lyonnaise
Assuming the 90 days trading horizon Icade SA is expected to under-perform the Fonciere Lyonnaise. But the stock apears to be less risky and, when comparing its historical volatility, Icade SA is 1.25 times less risky than Fonciere Lyonnaise. The stock trades about -0.26 of its potential returns per unit of risk. The Fonciere Lyonnaise is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 6,440 in Fonciere Lyonnaise on August 31, 2024 and sell it today you would earn a total of 860.00 from holding Fonciere Lyonnaise or generate 13.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icade SA vs. Fonciere Lyonnaise
Performance |
| Timeline |
| Icade SA |
| Fonciere Lyonnaise |
Icade SA and Fonciere Lyonnaise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icade SA and Fonciere Lyonnaise
The main advantage of trading using opposite Icade SA and Fonciere Lyonnaise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icade SA position performs unexpectedly, Fonciere Lyonnaise 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 Fonciere Lyonnaise will offset losses from the drop in Fonciere Lyonnaise's long position.| Icade SA vs. Altarea SCA | Icade SA vs. Carmila SA | Icade SA vs. Manitou BF SA | Icade SA vs. Ossiam Minimum Variance |
| Fonciere Lyonnaise vs. Gecina SA | Fonciere Lyonnaise vs. Icade SA | Fonciere Lyonnaise vs. Altarea SCA | Fonciere Lyonnaise 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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