Correlation Between Renault Socit and Affluent Medical
Can any of the company-specific risk be diversified away by investing in both Renault Socit and Affluent Medical 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 Renault Socit and Affluent Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renault Socit Anonyme and Affluent Medical SAS, you can compare the effects of market volatilities on Renault Socit and Affluent Medical 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 Renault Socit with a short position of Affluent Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renault Socit and Affluent Medical.
Diversification Opportunities for Renault Socit and Affluent Medical
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Renault and Affluent is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Renault Socit Anonyme and Affluent Medical SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affluent Medical SAS and Renault Socit 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 Renault Socit Anonyme are associated (or correlated) with Affluent Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affluent Medical SAS has no effect on the direction of Renault Socit i.e., Renault Socit and Affluent Medical go up and down completely randomly.
Pair Corralation between Renault Socit and Affluent Medical
Assuming the 90 days trading horizon Renault Socit Anonyme is expected to generate 0.24 times more return on investment than Affluent Medical. However, Renault Socit Anonyme is 4.25 times less risky than Affluent Medical. It trades about -0.1 of its potential returns per unit of risk. Affluent Medical SAS is currently generating about -0.11 per unit of risk. If you would invest 33,303 in Renault Socit Anonyme on September 14, 2024 and sell it today you would lose (1,083) from holding Renault Socit Anonyme or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renault Socit Anonyme vs. Affluent Medical SAS
Performance |
| Timeline |
| Renault Socit Anonyme |
| Affluent Medical SAS |
Renault Socit and Affluent Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renault Socit and Affluent Medical
The main advantage of trading using opposite Renault Socit and Affluent Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renault Socit position performs unexpectedly, Affluent Medical 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 Affluent Medical will offset losses from the drop in Affluent Medical's long position.| Renault Socit vs. Affluent Medical SAS | Renault Socit vs. Jacquet Metal Service | Renault Socit vs. Netmedia Group SA | Renault Socit vs. Innelec Multimedia |
| Affluent Medical vs. Aramis SAS | Affluent Medical vs. Spartoo SAS | Affluent Medical vs. Hydrogene De France | Affluent Medical vs. Omer Decugis Cie |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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