Correlation Between Smcp SAS and Claranova
Can any of the company-specific risk be diversified away by investing in both Smcp SAS and Claranova 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 Smcp SAS and Claranova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smcp SAS and Claranova SE, you can compare the effects of market volatilities on Smcp SAS and Claranova 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 Smcp SAS with a short position of Claranova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smcp SAS and Claranova.
Diversification Opportunities for Smcp SAS and Claranova
Good diversification
The 3 months correlation between Smcp and Claranova is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Smcp SAS and Claranova SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Claranova SE and Smcp SAS 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 Smcp SAS are associated (or correlated) with Claranova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Claranova SE has no effect on the direction of Smcp SAS i.e., Smcp SAS and Claranova go up and down completely randomly.
Pair Corralation between Smcp SAS and Claranova
Assuming the 90 days trading horizon Smcp SAS is expected to generate 1.55 times more return on investment than Claranova. However, Smcp SAS is 1.55 times more volatile than Claranova SE. It trades about 0.26 of its potential returns per unit of risk. Claranova SE is currently generating about 0.0 per unit of risk. If you would invest 240.00 in Smcp SAS on August 29, 2024 and sell it today you would earn a total of 53.00 from holding Smcp SAS or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smcp SAS vs. Claranova SE
Performance |
| Timeline |
| Smcp SAS |
| Claranova SE |
Smcp SAS and Claranova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smcp SAS and Claranova
The main advantage of trading using opposite Smcp SAS and Claranova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smcp SAS position performs unexpectedly, Claranova 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 Claranova will offset losses from the drop in Claranova's long position.| Smcp SAS vs. Maisons du Monde | Smcp SAS vs. Fnac Darty SA | Smcp SAS vs. Mersen SA | Smcp SAS vs. Interparfums SA |
| Claranova vs. Sword Group SE | Claranova vs. Neurones | Claranova vs. Aubay Socit Anonyme | Claranova vs. Groupe CRIT 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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