Correlation Between Manitou BF and Les Htels
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Les Htels 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 Manitou BF and Les Htels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Les Htels de, you can compare the effects of market volatilities on Manitou BF and Les Htels 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 Manitou BF with a short position of Les Htels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Les Htels.
Diversification Opportunities for Manitou BF and Les Htels
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Les is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Les Htels de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Htels de and Manitou BF 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 Manitou BF SA are associated (or correlated) with Les Htels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Htels de has no effect on the direction of Manitou BF i.e., Manitou BF and Les Htels go up and down completely randomly.
Pair Corralation between Manitou BF and Les Htels
Assuming the 90 days trading horizon Manitou BF SA is expected to generate 0.3 times more return on investment than Les Htels. However, Manitou BF SA is 3.34 times less risky than Les Htels. It trades about -0.13 of its potential returns per unit of risk. Les Htels de is currently generating about -0.05 per unit of risk. If you would invest 1,874 in Manitou BF SA on September 2, 2024 and sell it today you would lose (304.00) from holding Manitou BF SA or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Les Htels de
Performance |
| Timeline |
| Manitou BF SA |
| Les Htels de |
Manitou BF and Les Htels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Les Htels
The main advantage of trading using opposite Manitou BF and Les Htels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Les Htels 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 Les Htels will offset losses from the drop in Les Htels' long position.| Manitou BF vs. Air Liquide SA | Manitou BF vs. Vinci SA | Manitou BF vs. LOreal SA | Manitou BF vs. Compagnie de Saint Gobain |
| Les Htels vs. Les Hotels Bav | Les Htels vs. Groupe Partouche SA | Les Htels vs. Centrale dAchat Franaise | Les Htels vs. Manitou BF 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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