Correlation Between Imerys SA and Ipsos SA
Can any of the company-specific risk be diversified away by investing in both Imerys SA and Ipsos 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 Imerys SA and Ipsos SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imerys SA and Ipsos SA, you can compare the effects of market volatilities on Imerys SA and Ipsos 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 Imerys SA with a short position of Ipsos SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imerys SA and Ipsos SA.
Diversification Opportunities for Imerys SA and Ipsos SA
Good diversification
The 3 months correlation between Imerys and Ipsos is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Imerys SA and Ipsos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ipsos SA and Imerys SA 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 Imerys SA are associated (or correlated) with Ipsos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ipsos SA has no effect on the direction of Imerys SA i.e., Imerys SA and Ipsos SA go up and down completely randomly.
Pair Corralation between Imerys SA and Ipsos SA
Assuming the 90 days horizon Imerys SA is expected to generate 1.1 times more return on investment than Ipsos SA. However, Imerys SA is 1.1 times more volatile than Ipsos SA. It trades about 0.0 of its potential returns per unit of risk. Ipsos SA is currently generating about -0.01 per unit of risk. If you would invest 3,197 in Imerys SA on August 29, 2024 and sell it today you would lose (331.00) from holding Imerys SA or give up 10.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imerys SA vs. Ipsos SA
Performance |
| Timeline |
| Imerys SA |
| Ipsos SA |
Imerys SA and Ipsos SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imerys SA and Ipsos SA
The main advantage of trading using opposite Imerys SA and Ipsos SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imerys SA position performs unexpectedly, Ipsos 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 Ipsos SA will offset losses from the drop in Ipsos SA's long position.| Imerys SA vs. Rubis SCA | Imerys SA vs. Eramet SA | Imerys SA vs. Nexity | Imerys SA vs. Compagnie de Saint Gobain |
| Ipsos SA vs. Mtropole Tlvision SA | Ipsos SA vs. Alten SA | Ipsos SA vs. Publicis Groupe SA | Ipsos SA vs. Imerys 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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