Correlation Between STORE ELECTRONIC and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and Veolia Environnement 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 STORE ELECTRONIC and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Veolia Environnement SA, you can compare the effects of market volatilities on STORE ELECTRONIC and Veolia Environnement 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 STORE ELECTRONIC with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Veolia Environnement.
Diversification Opportunities for STORE ELECTRONIC and Veolia Environnement
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STORE and Veolia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and Veolia Environnement go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Veolia Environnement
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.14 times more return on investment than Veolia Environnement. However, STORE ELECTRONIC is 1.14 times more volatile than Veolia Environnement SA. It trades about -0.01 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about -0.12 per unit of risk. If you would invest 13,560 in STORE ELECTRONIC on September 19, 2024 and sell it today you would lose (100.00) from holding STORE ELECTRONIC or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. Veolia Environnement SA
Performance |
| Timeline |
| STORE ELECTRONIC |
| Veolia Environnement |
STORE ELECTRONIC and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and Veolia Environnement
The main advantage of trading using opposite STORE ELECTRONIC and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc |
| Veolia Environnement vs. STORE ELECTRONIC | Veolia Environnement vs. Nucletron Electronic Aktiengesellschaft | Veolia Environnement vs. United Utilities Group | Veolia Environnement vs. NORTHEAST UTILITIES |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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