Correlation Between LOreal SA and Odyssee Technologies
Can any of the company-specific risk be diversified away by investing in both LOreal SA and Odyssee Technologies 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 LOreal SA and Odyssee Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOreal SA and Odyssee Technologies SA, you can compare the effects of market volatilities on LOreal SA and Odyssee Technologies 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 LOreal SA with a short position of Odyssee Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOreal SA and Odyssee Technologies.
Diversification Opportunities for LOreal SA and Odyssee Technologies
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between LOreal and Odyssee is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding LOreal SA and Odyssee Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssee Technologies and LOreal 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 LOreal SA are associated (or correlated) with Odyssee Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssee Technologies has no effect on the direction of LOreal SA i.e., LOreal SA and Odyssee Technologies go up and down completely randomly.
Pair Corralation between LOreal SA and Odyssee Technologies
Assuming the 90 days horizon LOreal SA is expected to generate 349.11 times less return on investment than Odyssee Technologies. But when comparing it to its historical volatility, LOreal SA is 2.24 times less risky than Odyssee Technologies. It trades about 0.0 of its potential returns per unit of risk. Odyssee Technologies SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,555 in Odyssee Technologies SA on November 2, 2024 and sell it today you would earn a total of 145.00 from holding Odyssee Technologies SA or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 6.56% |
| Values | Daily Returns |
LOreal SA vs. Odyssee Technologies SA
Performance |
| Timeline |
| LOreal SA |
| Odyssee Technologies |
LOreal SA and Odyssee Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOreal SA and Odyssee Technologies
The main advantage of trading using opposite LOreal SA and Odyssee Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOreal SA position performs unexpectedly, Odyssee Technologies 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 Odyssee Technologies will offset losses from the drop in Odyssee Technologies' long position.| LOreal SA vs. LVMH Mot Hennessy | LOreal SA vs. Danone SA | LOreal SA vs. Air Liquide SA | LOreal SA vs. Hermes International SCA |
| Odyssee Technologies vs. Hotel Majestic Cannes | Odyssee Technologies vs. Les Hotels Bav | Odyssee Technologies vs. Impulse Fitness Solutions | Odyssee Technologies vs. ISPD Network 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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