Correlation Between Lagardere SCA and Television Francaise
Can any of the company-specific risk be diversified away by investing in both Lagardere SCA and Television Francaise 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 Lagardere SCA and Television Francaise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lagardere SCA and Television Francaise 1, you can compare the effects of market volatilities on Lagardere SCA and Television Francaise 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 Lagardere SCA with a short position of Television Francaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lagardere SCA and Television Francaise.
Diversification Opportunities for Lagardere SCA and Television Francaise
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lagardere and Television is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lagardere SCA and Television Francaise 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Television Francaise and Lagardere SCA 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 Lagardere SCA are associated (or correlated) with Television Francaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Television Francaise has no effect on the direction of Lagardere SCA i.e., Lagardere SCA and Television Francaise go up and down completely randomly.
Pair Corralation between Lagardere SCA and Television Francaise
Assuming the 90 days trading horizon Lagardere SCA is expected to generate 1.93 times less return on investment than Television Francaise. But when comparing it to its historical volatility, Lagardere SCA is 1.1 times less risky than Television Francaise. It trades about 0.02 of its potential returns per unit of risk. Television Francaise 1 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 638.00 in Television Francaise 1 on November 5, 2024 and sell it today you would earn a total of 123.00 from holding Television Francaise 1 or generate 19.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Lagardere SCA vs. Television Francaise 1
Performance |
| Timeline |
| Lagardere SCA |
| Television Francaise |
Lagardere SCA and Television Francaise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lagardere SCA and Television Francaise
The main advantage of trading using opposite Lagardere SCA and Television Francaise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lagardere SCA position performs unexpectedly, Television Francaise 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 Television Francaise will offset losses from the drop in Television Francaise's long position.| Lagardere SCA vs. Television Francaise 1 | Lagardere SCA vs. Publicis Groupe SA | Lagardere SCA vs. Bouygues SA | Lagardere SCA vs. Accor S A |
| Television Francaise vs. Mtropole Tlvision SA | Television Francaise vs. Lagardere SCA | Television Francaise vs. Bouygues SA | Television Francaise vs. Publicis Groupe 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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