Correlation Between LOreal SA and Atland SA
Can any of the company-specific risk be diversified away by investing in both LOreal SA and Atland 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 LOreal SA and Atland SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOreal SA and Atland SA, you can compare the effects of market volatilities on LOreal SA and Atland 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 LOreal SA with a short position of Atland SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOreal SA and Atland SA.
Diversification Opportunities for LOreal SA and Atland SA
Very good diversification
The 3 months correlation between LOreal and Atland is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding LOreal SA and Atland SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atland SA 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 Atland SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atland SA has no effect on the direction of LOreal SA i.e., LOreal SA and Atland SA go up and down completely randomly.
Pair Corralation between LOreal SA and Atland SA
Assuming the 90 days horizon LOreal SA is expected to under-perform the Atland SA. In addition to that, LOreal SA is 1.37 times more volatile than Atland SA. It trades about -0.14 of its total potential returns per unit of risk. Atland SA is currently generating about -0.03 per unit of volatility. If you would invest 4,380 in Atland SA on September 1, 2024 and sell it today you would lose (40.00) from holding Atland SA or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LOreal SA vs. Atland SA
Performance |
| Timeline |
| LOreal SA |
| Atland SA |
LOreal SA and Atland SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOreal SA and Atland SA
The main advantage of trading using opposite LOreal SA and Atland SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOreal SA position performs unexpectedly, Atland 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 Atland SA will offset losses from the drop in Atland SA's 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 |
| Atland SA vs. Credit Agricole SA | Atland SA vs. Gaztransport Technigaz SAS | Atland SA vs. Eutelsat Communications SA | Atland SA vs. ZCCM Investments Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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