Correlation Between Quadient and IDS France
Can any of the company-specific risk be diversified away by investing in both Quadient and IDS France 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 Quadient and IDS France into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quadient SA and IDS France SAS, you can compare the effects of market volatilities on Quadient and IDS France 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 Quadient with a short position of IDS France. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quadient and IDS France.
Diversification Opportunities for Quadient and IDS France
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Quadient and IDS is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Quadient SA and IDS France SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDS France SAS and Quadient 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 Quadient SA are associated (or correlated) with IDS France. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDS France SAS has no effect on the direction of Quadient i.e., Quadient and IDS France go up and down completely randomly.
Pair Corralation between Quadient and IDS France
Assuming the 90 days trading horizon Quadient is expected to generate 5.65 times less return on investment than IDS France. But when comparing it to its historical volatility, Quadient SA is 4.51 times less risky than IDS France. It trades about 0.02 of its potential returns per unit of risk. IDS France SAS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 60.00 in IDS France SAS on August 28, 2024 and sell it today you would lose (11.00) from holding IDS France SAS or give up 18.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.82% |
| Values | Daily Returns |
Quadient SA vs. IDS France SAS
Performance |
| Timeline |
| Quadient SA |
| IDS France SAS |
Quadient and IDS France Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quadient and IDS France
The main advantage of trading using opposite Quadient and IDS France positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quadient position performs unexpectedly, IDS France 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 IDS France will offset losses from the drop in IDS France's long position.The idea behind Quadient SA and IDS France SAS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| IDS France vs. Thales SA | IDS France vs. Safran SA | IDS France vs. Air Liquide SA | IDS France vs. Capgemini 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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