Correlation Between Prodways Group and Claranova
Can any of the company-specific risk be diversified away by investing in both Prodways Group and Claranova 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 Prodways Group and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodways Group SA and Claranova SE, you can compare the effects of market volatilities on Prodways Group and Claranova 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 Prodways Group with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodways Group and Claranova.
Diversification Opportunities for Prodways Group and Claranova
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prodways and Claranova is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Prodways Group SA and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Prodways 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 Prodways Group SA are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Prodways Group i.e., Prodways Group and Claranova go up and down completely randomly.
Pair Corralation between Prodways Group and Claranova
Assuming the 90 days trading horizon Prodways Group SA is expected to generate 0.73 times more return on investment than Claranova. However, Prodways Group SA is 1.37 times less risky than Claranova. It trades about -0.03 of its potential returns per unit of risk. Claranova SE is currently generating about -0.06 per unit of risk. If you would invest 53.00 in Prodways Group SA on August 24, 2024 and sell it today you would lose (3.00) from holding Prodways Group SA or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Prodways Group SA vs. Claranova SE
Performance |
| Timeline |
| Prodways Group SA |
| Claranova SE |
Prodways Group and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodways Group and Claranova
The main advantage of trading using opposite Prodways Group and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodways Group position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Prodways Group vs. Balyo SA | Prodways Group vs. Lumibird SA | Prodways Group vs. Chargeurs SA | Prodways Group vs. Figeac Aero SA |
| Claranova vs. Solutions 30 SE | Claranova vs. BigBen Interactive | Claranova vs. SA Catana Group | Claranova vs. Solocal Group 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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