Correlation Between Rolls-Royce Holdings and Groupama Entreprises
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By analyzing existing cross correlation between Rolls Royce Holdings plc and Groupama Entreprises N, you can compare the effects of market volatilities on Rolls-Royce Holdings and Groupama Entreprises 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 Rolls-Royce Holdings with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rolls-Royce Holdings and Groupama Entreprises.
Diversification Opportunities for Rolls-Royce Holdings and Groupama Entreprises
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rolls-Royce and Groupama is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Rolls Royce Holdings plc and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Rolls-Royce Holdings 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 Rolls Royce Holdings plc are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Rolls-Royce Holdings i.e., Rolls-Royce Holdings and Groupama Entreprises go up and down completely randomly.
Pair Corralation between Rolls-Royce Holdings and Groupama Entreprises
Assuming the 90 days horizon Rolls Royce Holdings plc is expected to generate 202.62 times more return on investment than Groupama Entreprises. However, Rolls-Royce Holdings is 202.62 times more volatile than Groupama Entreprises N. It trades about 0.08 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.96 per unit of risk. If you would invest 646.00 in Rolls Royce Holdings plc on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Rolls Royce Holdings plc or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Rolls Royce Holdings plc vs. Groupama Entreprises N
Performance |
| Timeline |
| Rolls Royce Holdings |
| Groupama Entreprises |
Rolls-Royce Holdings and Groupama Entreprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rolls-Royce Holdings and Groupama Entreprises
The main advantage of trading using opposite Rolls-Royce Holdings and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rolls-Royce Holdings position performs unexpectedly, Groupama Entreprises 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 Groupama Entreprises will offset losses from the drop in Groupama Entreprises' long position.| Rolls-Royce Holdings vs. Lockheed Martin | Rolls-Royce Holdings vs. The Boeing | Rolls-Royce Holdings vs. Airbus SE |
| Groupama Entreprises vs. Lyxor 1 | Groupama Entreprises vs. Xtrackers LevDAX | Groupama Entreprises vs. Xtrackers ShortDAX |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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