Correlation Between Legrand SA and Accor S
Can any of the company-specific risk be diversified away by investing in both Legrand SA and Accor S 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 Legrand SA and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legrand SA and Accor S A, you can compare the effects of market volatilities on Legrand SA and Accor S 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 Legrand SA with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legrand SA and Accor S.
Diversification Opportunities for Legrand SA and Accor S
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legrand and Accor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legrand SA and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Legrand 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 Legrand SA are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Legrand SA i.e., Legrand SA and Accor S go up and down completely randomly.
Pair Corralation between Legrand SA and Accor S
Assuming the 90 days horizon Legrand SA is expected to under-perform the Accor S. In addition to that, Legrand SA is 1.72 times more volatile than Accor S A. It trades about -0.15 of its total potential returns per unit of risk. Accor S A is currently generating about -0.01 per unit of volatility. If you would invest 4,267 in Accor S A on August 25, 2024 and sell it today you would lose (19.00) from holding Accor S A or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legrand SA vs. Accor S A
Performance |
| Timeline |
| Legrand SA |
| Accor S A |
Legrand SA and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legrand SA and Accor S
The main advantage of trading using opposite Legrand SA and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legrand SA position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.| Legrand SA vs. Schneider Electric SE | Legrand SA vs. Publicis Groupe SA | Legrand SA vs. Pernod Ricard SA | Legrand SA vs. Compagnie Generale des |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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