Correlation Between Rubis SCA and Stellantis
Can any of the company-specific risk be diversified away by investing in both Rubis SCA and Stellantis 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 Rubis SCA and Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rubis SCA and Stellantis NV, you can compare the effects of market volatilities on Rubis SCA and Stellantis 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 Rubis SCA with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubis SCA and Stellantis.
Diversification Opportunities for Rubis SCA and Stellantis
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rubis and Stellantis is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and Rubis SCA 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 Rubis SCA are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Rubis SCA i.e., Rubis SCA and Stellantis go up and down completely randomly.
Pair Corralation between Rubis SCA and Stellantis
Assuming the 90 days trading horizon Rubis SCA is expected to generate 1.03 times more return on investment than Stellantis. However, Rubis SCA is 1.03 times more volatile than Stellantis NV. It trades about 0.04 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.07 per unit of risk. If you would invest 2,018 in Rubis SCA on August 26, 2024 and sell it today you would earn a total of 296.00 from holding Rubis SCA or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rubis SCA vs. Stellantis NV
Performance |
| Timeline |
| Rubis SCA |
| Stellantis NV |
Rubis SCA and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rubis SCA and Stellantis
The main advantage of trading using opposite Rubis SCA and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubis SCA position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Rubis SCA vs. Gaztransport Technigaz SAS | Rubis SCA vs. Nexity | Rubis SCA vs. SCOR SE | Rubis SCA vs. TotalEnergies SE |
| Stellantis vs. LVMH Mot Hennessy | Stellantis vs. LOreal SA | Stellantis vs. Hermes International SCA | Stellantis vs. Manitou BF 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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