Correlation Between Mercialys and Acanthe Dveloppement
Can any of the company-specific risk be diversified away by investing in both Mercialys and Acanthe Dveloppement 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 Mercialys and Acanthe Dveloppement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercialys SA and Acanthe Dveloppement, you can compare the effects of market volatilities on Mercialys and Acanthe Dveloppement 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 Mercialys with a short position of Acanthe Dveloppement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercialys and Acanthe Dveloppement.
Diversification Opportunities for Mercialys and Acanthe Dveloppement
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercialys and Acanthe is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mercialys SA and Acanthe Dveloppement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acanthe Dveloppement and Mercialys 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 Mercialys SA are associated (or correlated) with Acanthe Dveloppement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acanthe Dveloppement has no effect on the direction of Mercialys i.e., Mercialys and Acanthe Dveloppement go up and down completely randomly.
Pair Corralation between Mercialys and Acanthe Dveloppement
Assuming the 90 days trading horizon Mercialys SA is expected to generate 0.46 times more return on investment than Acanthe Dveloppement. However, Mercialys SA is 2.17 times less risky than Acanthe Dveloppement. It trades about -0.11 of its potential returns per unit of risk. Acanthe Dveloppement is currently generating about -0.07 per unit of risk. If you would invest 1,179 in Mercialys SA on August 28, 2024 and sell it today you would lose (121.00) from holding Mercialys SA or give up 10.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercialys SA vs. Acanthe Dveloppement
Performance |
| Timeline |
| Mercialys SA |
| Acanthe Dveloppement |
Mercialys and Acanthe Dveloppement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercialys and Acanthe Dveloppement
The main advantage of trading using opposite Mercialys and Acanthe Dveloppement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercialys position performs unexpectedly, Acanthe Dveloppement 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 Acanthe Dveloppement will offset losses from the drop in Acanthe Dveloppement's long position.The idea behind Mercialys SA and Acanthe Dveloppement 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.| Acanthe Dveloppement vs. Gecina SA | Acanthe Dveloppement vs. Icade SA | Acanthe Dveloppement vs. Altarea SCA | Acanthe Dveloppement 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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