Correlation Between OVH Groupe and Voltalia
Can any of the company-specific risk be diversified away by investing in both OVH Groupe and Voltalia 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 OVH Groupe and Voltalia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OVH Groupe SAS and Voltalia SA, you can compare the effects of market volatilities on OVH Groupe and Voltalia 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 OVH Groupe with a short position of Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of OVH Groupe and Voltalia.
Diversification Opportunities for OVH Groupe and Voltalia
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OVH and Voltalia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding OVH Groupe SAS and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA and OVH Groupe 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 OVH Groupe SAS are associated (or correlated) with Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of OVH Groupe i.e., OVH Groupe and Voltalia go up and down completely randomly.
Pair Corralation between OVH Groupe and Voltalia
Assuming the 90 days trading horizon OVH Groupe SAS is expected to under-perform the Voltalia. But the stock apears to be less risky and, when comparing its historical volatility, OVH Groupe SAS is 1.02 times less risky than Voltalia. The stock trades about -0.19 of its potential returns per unit of risk. The Voltalia SA is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 662.00 in Voltalia SA on November 28, 2024 and sell it today you would earn a total of 141.00 from holding Voltalia SA or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OVH Groupe SAS vs. Voltalia SA
Performance |
| Timeline |
| OVH Groupe SAS |
| Voltalia SA |
OVH Groupe and Voltalia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OVH Groupe and Voltalia
The main advantage of trading using opposite OVH Groupe and Voltalia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OVH Groupe position performs unexpectedly, Voltalia 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 Voltalia will offset losses from the drop in Voltalia's long position.| OVH Groupe vs. La Francaise Des | OVH Groupe vs. TotalEnergies SE | OVH Groupe vs. Worldline SA | OVH Groupe vs. Atos SE |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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