Correlation Between Maisons Du and Roche Bobois
Can any of the company-specific risk be diversified away by investing in both Maisons Du 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 Maisons Du and Roche Bobois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maisons du Monde and Roche Bobois, you can compare the effects of market volatilities on Maisons Du 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 Maisons Du with a short position of Roche Bobois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maisons Du and Roche Bobois.
Diversification Opportunities for Maisons Du and Roche Bobois
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maisons and Roche is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Maisons du Monde and Roche Bobois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Bobois and Maisons Du 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 Maisons du Monde 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 Maisons Du i.e., Maisons Du and Roche Bobois go up and down completely randomly.
Pair Corralation between Maisons Du and Roche Bobois
Assuming the 90 days trading horizon Maisons du Monde is expected to under-perform the Roche Bobois. In addition to that, Maisons Du is 1.57 times more volatile than Roche Bobois. It trades about -0.07 of its total potential returns per unit of risk. Roche Bobois is currently generating about 0.03 per unit of volatility. If you would invest 3,270 in Roche Bobois on August 31, 2024 and sell it today you would earn a total of 510.00 from holding Roche Bobois or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maisons du Monde vs. Roche Bobois
Performance |
| Timeline |
| Maisons du Monde |
| Roche Bobois |
Maisons Du and Roche Bobois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maisons Du and Roche Bobois
The main advantage of trading using opposite Maisons Du and Roche Bobois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maisons Du 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.| Maisons Du vs. Fnac Darty SA | Maisons Du vs. Trigano SA | Maisons Du vs. Elis SA | Maisons Du vs. Derichebourg |
| Roche Bobois vs. SA Catana Group | Roche Bobois vs. Verallia | Roche Bobois vs. Thermador Groupe SA | Roche Bobois vs. Maisons du Monde |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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