Correlation Between SPIE SA and Edenred SA
Can any of the company-specific risk be diversified away by investing in both SPIE SA and Edenred SA 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 SPIE SA and Edenred SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPIE SA and Edenred SA, you can compare the effects of market volatilities on SPIE SA and Edenred SA 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 SPIE SA with a short position of Edenred SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPIE SA and Edenred SA.
Diversification Opportunities for SPIE SA and Edenred SA
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPIE and Edenred is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPIE SA and Edenred SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edenred SA and SPIE 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 SPIE SA are associated (or correlated) with Edenred SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edenred SA has no effect on the direction of SPIE SA i.e., SPIE SA and Edenred SA go up and down completely randomly.
Pair Corralation between SPIE SA and Edenred SA
Assuming the 90 days trading horizon SPIE SA is expected to generate 0.68 times more return on investment than Edenred SA. However, SPIE SA is 1.47 times less risky than Edenred SA. It trades about -0.1 of its potential returns per unit of risk. Edenred SA is currently generating about -0.08 per unit of risk. If you would invest 3,780 in SPIE SA on September 1, 2024 and sell it today you would lose (800.00) from holding SPIE SA or give up 21.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPIE SA vs. Edenred SA
Performance |
| Timeline |
| SPIE SA |
| Edenred SA |
SPIE SA and Edenred SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPIE SA and Edenred SA
The main advantage of trading using opposite SPIE SA and Edenred SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPIE SA position performs unexpectedly, Edenred SA 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 Edenred SA will offset losses from the drop in Edenred SA's long position.The idea behind SPIE SA and Edenred SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Edenred SA vs. Bureau Veritas SA | Edenred SA vs. Sodexo SA | Edenred SA vs. Legrand SA | Edenred SA vs. Accor S A |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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