Correlation Between 3M and Vivendi SA
Can any of the company-specific risk be diversified away by investing in both 3M and Vivendi SA 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 3M and Vivendi SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Vivendi SA, you can compare the effects of market volatilities on 3M and Vivendi SA 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 3M with a short position of Vivendi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Vivendi SA.
Diversification Opportunities for 3M and Vivendi SA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3M and Vivendi is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Vivendi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SA and 3M 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 3M Company are associated (or correlated) with Vivendi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SA has no effect on the direction of 3M i.e., 3M and Vivendi SA go up and down completely randomly.
Pair Corralation between 3M and Vivendi SA
Considering the 90-day investment horizon 3M Company is expected to generate about the same return on investment as Vivendi SA. But, 3M Company is 1.1 times less risky than Vivendi SA. It trades about 0.04 of its potential returns per unit of risk. Vivendi SA is currently generating about 0.04 per unit of risk. If you would invest 891.00 in Vivendi SA on September 2, 2024 and sell it today you would earn a total of 259.00 from holding Vivendi SA or generate 29.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.48% |
| Values | Daily Returns |
3M Company vs. Vivendi SA
Performance |
| Timeline |
| 3M Company |
| Vivendi SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
3M and Vivendi SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Vivendi SA
The main advantage of trading using opposite 3M and Vivendi SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Vivendi SA 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 Vivendi SA will offset losses from the drop in Vivendi SA's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Vivendi SA vs. Universal Music Group | Vivendi SA vs. Reservoir Media | Vivendi SA vs. Atlanta Braves Holdings, | Vivendi SA vs. Warner Music Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |