Correlation Between Eurazeo and Edenred SA
Can any of the company-specific risk be diversified away by investing in both Eurazeo and Edenred SA 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 Eurazeo and Edenred SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurazeo and Edenred SA, you can compare the effects of market volatilities on Eurazeo and Edenred SA 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 Eurazeo with a short position of Edenred SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurazeo and Edenred SA.
Diversification Opportunities for Eurazeo and Edenred SA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eurazeo and Edenred is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Edenred SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edenred SA and Eurazeo 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 Eurazeo are associated (or correlated) with Edenred SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edenred SA has no effect on the direction of Eurazeo i.e., Eurazeo and Edenred SA go up and down completely randomly.
Pair Corralation between Eurazeo and Edenred SA
Assuming the 90 days horizon Eurazeo is expected to generate 0.83 times more return on investment than Edenred SA. However, Eurazeo is 1.2 times less risky than Edenred SA. It trades about 0.03 of its potential returns per unit of risk. Edenred SA is currently generating about -0.05 per unit of risk. If you would invest 5,658 in Eurazeo on August 30, 2024 and sell it today you would earn a total of 1,302 from holding Eurazeo or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eurazeo vs. Edenred SA
Performance |
| Timeline |
| Eurazeo |
| Edenred SA |
Eurazeo and Edenred SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eurazeo and Edenred SA
The main advantage of trading using opposite Eurazeo and Edenred SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurazeo position performs unexpectedly, Edenred SA 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 Edenred SA will offset losses from the drop in Edenred SA's long position.| Eurazeo vs. CBO Territoria SA | Eurazeo vs. Rubis SCA | Eurazeo vs. Nexity | Eurazeo vs. Gaztransport Technigaz SAS |
| Edenred SA vs. Bureau Veritas SA | Edenred SA vs. Sodexo SA | Edenred SA vs. Legrand SA | Edenred SA vs. Accor S A |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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