Correlation Between Pepco Group and Ailleron
Can any of the company-specific risk be diversified away by investing in both Pepco Group and Ailleron 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 Pepco Group and Ailleron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pepco Group BV and Ailleron SA, you can compare the effects of market volatilities on Pepco Group and Ailleron 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 Pepco Group with a short position of Ailleron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pepco Group and Ailleron.
Diversification Opportunities for Pepco Group and Ailleron
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pepco and Ailleron is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pepco Group BV and Ailleron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ailleron SA and Pepco Group 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 Pepco Group BV are associated (or correlated) with Ailleron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ailleron SA has no effect on the direction of Pepco Group i.e., Pepco Group and Ailleron go up and down completely randomly.
Pair Corralation between Pepco Group and Ailleron
Assuming the 90 days trading horizon Pepco Group is expected to generate 1.31 times less return on investment than Ailleron. In addition to that, Pepco Group is 2.39 times more volatile than Ailleron SA. It trades about 0.12 of its total potential returns per unit of risk. Ailleron SA is currently generating about 0.37 per unit of volatility. If you would invest 2,035 in Ailleron SA on October 9, 2024 and sell it today you would earn a total of 165.00 from holding Ailleron SA or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pepco Group BV vs. Ailleron SA
Performance |
| Timeline |
| Pepco Group BV |
| Ailleron SA |
Pepco Group and Ailleron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pepco Group and Ailleron
The main advantage of trading using opposite Pepco Group and Ailleron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pepco Group position performs unexpectedly, Ailleron 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 Ailleron will offset losses from the drop in Ailleron's long position.| Pepco Group vs. Movie Games SA | Pepco Group vs. ING Bank lski | Pepco Group vs. Skyline Investment SA | Pepco Group vs. Echo Investment SA |
| Ailleron vs. Cloud Technologies SA | Ailleron vs. Asseco Business Solutions | Ailleron vs. Asseco South Eastern | Ailleron vs. Vercom 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |