Correlation Between Icade SA and Roche Bobois
Can any of the company-specific risk be diversified away by investing in both Icade SA and Roche Bobois 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 Roche Bobois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icade SA and Roche Bobois, you can compare the effects of market volatilities on Icade SA and Roche Bobois 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 Roche Bobois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icade SA and Roche Bobois.
Diversification Opportunities for Icade SA and Roche Bobois
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Icade and Roche is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Icade SA and Roche Bobois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Bobois 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 Roche Bobois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Bobois has no effect on the direction of Icade SA i.e., Icade SA and Roche Bobois go up and down completely randomly.
Pair Corralation between Icade SA and Roche Bobois
Assuming the 90 days trading horizon Icade SA is expected to generate 1.25 times more return on investment than Roche Bobois. However, Icade SA is 1.25 times more volatile than Roche Bobois. It trades about -0.05 of its potential returns per unit of risk. Roche Bobois is currently generating about -0.11 per unit of risk. If you would invest 2,593 in Icade SA on September 1, 2024 and sell it today you would lose (367.00) from holding Icade SA or give up 14.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Icade SA vs. Roche Bobois
Performance |
| Timeline |
| Icade SA |
| Roche Bobois |
Icade SA and Roche Bobois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icade SA and Roche Bobois
The main advantage of trading using opposite Icade SA and Roche Bobois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icade SA position performs unexpectedly, Roche Bobois 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 Roche Bobois will offset losses from the drop in Roche Bobois' long position.The idea behind Icade SA and Roche Bobois 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.| Roche Bobois vs. Vente Unique | Roche Bobois vs. Groupe Sfpi | Roche Bobois vs. Cegedim SA | Roche Bobois vs. SA Catana Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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