Correlation Between Etablissements Maurel and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Etablissements Maurel and Derichebourg 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 Etablissements Maurel and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etablissements Maurel et and Derichebourg, you can compare the effects of market volatilities on Etablissements Maurel and Derichebourg 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 Etablissements Maurel with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissements Maurel and Derichebourg.
Diversification Opportunities for Etablissements Maurel and Derichebourg
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Etablissements and Derichebourg is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Etablissements Maurel et and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Etablissements Maurel 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 Etablissements Maurel et are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Etablissements Maurel i.e., Etablissements Maurel and Derichebourg go up and down completely randomly.
Pair Corralation between Etablissements Maurel and Derichebourg
Assuming the 90 days trading horizon Etablissements Maurel et is expected to generate 0.56 times more return on investment than Derichebourg. However, Etablissements Maurel et is 1.79 times less risky than Derichebourg. It trades about 0.12 of its potential returns per unit of risk. Derichebourg is currently generating about -0.19 per unit of risk. If you would invest 479.00 in Etablissements Maurel et on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Etablissements Maurel et or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissements Maurel et vs. Derichebourg
Performance |
| Timeline |
| Etablissements Maurel |
| Derichebourg |
Etablissements Maurel and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissements Maurel and Derichebourg
The main advantage of trading using opposite Etablissements Maurel and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissements Maurel position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Etablissements Maurel vs. Vallourec | Etablissements Maurel vs. Eramet SA | Etablissements Maurel vs. Soitec SA | Etablissements Maurel vs. Nexans SA |
| Derichebourg vs. Eramet SA | Derichebourg vs. Trigano SA | Derichebourg vs. Soitec SA | Derichebourg vs. Rubis SCA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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