Correlation Between Haulotte Group and Derichebourg
Can any of the company-specific risk be diversified away by investing in both Haulotte Group and Derichebourg 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 Haulotte Group and Derichebourg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haulotte Group SA and Derichebourg, you can compare the effects of market volatilities on Haulotte Group and Derichebourg 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 Haulotte Group with a short position of Derichebourg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haulotte Group and Derichebourg.
Diversification Opportunities for Haulotte Group and Derichebourg
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Haulotte and Derichebourg is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Haulotte Group SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Haulotte 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 Haulotte Group SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Haulotte Group i.e., Haulotte Group and Derichebourg go up and down completely randomly.
Pair Corralation between Haulotte Group and Derichebourg
Assuming the 90 days trading horizon Haulotte Group SA is expected to generate 0.53 times more return on investment than Derichebourg. However, Haulotte Group SA is 1.87 times less risky than Derichebourg. It trades about -0.07 of its potential returns per unit of risk. Derichebourg is currently generating about -0.19 per unit of risk. If you would invest 270.00 in Haulotte Group SA on August 31, 2024 and sell it today you would lose (6.00) from holding Haulotte Group SA or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haulotte Group SA vs. Derichebourg
Performance |
| Timeline |
| Haulotte Group SA |
| Derichebourg |
Haulotte Group and Derichebourg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haulotte Group and Derichebourg
The main advantage of trading using opposite Haulotte Group and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haulotte Group position performs unexpectedly, Derichebourg 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 Derichebourg will offset losses from the drop in Derichebourg's long position.| Haulotte Group vs. Manitou BF SA | Haulotte Group vs. NRJ Group | Haulotte Group vs. Etablissements Maurel et | Haulotte Group vs. Trigano SA |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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