Correlation Between Safran SA and Carrefour
Can any of the company-specific risk be diversified away by investing in both Safran SA and Carrefour 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 Safran SA and Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safran SA and Carrefour SA, you can compare the effects of market volatilities on Safran SA and Carrefour 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 Safran SA with a short position of Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safran SA and Carrefour.
Diversification Opportunities for Safran SA and Carrefour
Modest diversification
The 3 months correlation between Safran and Carrefour is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Safran SA and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA and Safran SA 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 Safran SA are associated (or correlated) with Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of Safran SA i.e., Safran SA and Carrefour go up and down completely randomly.
Pair Corralation between Safran SA and Carrefour
Assuming the 90 days trading horizon Safran SA is expected to generate 0.79 times more return on investment than Carrefour. However, Safran SA is 1.27 times less risky than Carrefour. It trades about 0.13 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.05 per unit of risk. If you would invest 21,070 in Safran SA on August 25, 2024 and sell it today you would earn a total of 840.00 from holding Safran SA or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safran SA vs. Carrefour SA
Performance |
| Timeline |
| Safran SA |
| Carrefour SA |
Safran SA and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safran SA and Carrefour
The main advantage of trading using opposite Safran SA and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safran SA position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| Safran SA vs. Raytheon Technologies Corp | Safran SA vs. The Boeing | Safran SA vs. The Boeing | Safran SA vs. Airbus SE |
| Carrefour vs. United Rentals | Carrefour vs. COMPUTERSHARE | Carrefour vs. Alfa Financial Software | Carrefour vs. LG Display Co |
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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