Correlation Between Seche Environnem and Covivio Hotels
Can any of the company-specific risk be diversified away by investing in both Seche Environnem and Covivio Hotels 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 Seche Environnem and Covivio Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnem and Covivio Hotels, you can compare the effects of market volatilities on Seche Environnem and Covivio Hotels 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 Seche Environnem with a short position of Covivio Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnem and Covivio Hotels.
Diversification Opportunities for Seche Environnem and Covivio Hotels
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seche and Covivio is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnem and Covivio Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio Hotels and Seche Environnem 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 Seche Environnem are associated (or correlated) with Covivio Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio Hotels has no effect on the direction of Seche Environnem i.e., Seche Environnem and Covivio Hotels go up and down completely randomly.
Pair Corralation between Seche Environnem and Covivio Hotels
Assuming the 90 days trading horizon Seche Environnem is expected to under-perform the Covivio Hotels. In addition to that, Seche Environnem is 1.47 times more volatile than Covivio Hotels. It trades about -0.08 of its total potential returns per unit of risk. Covivio Hotels is currently generating about 0.11 per unit of volatility. If you would invest 1,545 in Covivio Hotels on September 1, 2024 and sell it today you would earn a total of 325.00 from holding Covivio Hotels or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seche Environnem vs. Covivio Hotels
Performance |
| Timeline |
| Seche Environnem |
| Covivio Hotels |
Seche Environnem and Covivio Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnem and Covivio Hotels
The main advantage of trading using opposite Seche Environnem and Covivio Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnem position performs unexpectedly, Covivio Hotels 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 Covivio Hotels will offset losses from the drop in Covivio Hotels' long position.| Seche Environnem vs. Derichebourg | Seche Environnem vs. High Co SA | Seche Environnem vs. Jacquet Metal Service |
| Covivio Hotels vs. Covivio SA | Covivio Hotels vs. Altarea SCA | Covivio Hotels vs. Carmila SA | Covivio Hotels vs. Icade 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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