Correlation Between SPIE SA and Tikehau Capital
Can any of the company-specific risk be diversified away by investing in both SPIE SA and Tikehau Capital 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 Tikehau Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPIE SA and Tikehau Capital, you can compare the effects of market volatilities on SPIE SA and Tikehau Capital 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 Tikehau Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPIE SA and Tikehau Capital.
Diversification Opportunities for SPIE SA and Tikehau Capital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPIE and Tikehau is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding SPIE SA and Tikehau Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikehau Capital 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 Tikehau Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikehau Capital has no effect on the direction of SPIE SA i.e., SPIE SA and Tikehau Capital go up and down completely randomly.
Pair Corralation between SPIE SA and Tikehau Capital
Assuming the 90 days trading horizon SPIE SA is expected to under-perform the Tikehau Capital. In addition to that, SPIE SA is 1.34 times more volatile than Tikehau Capital. It trades about -0.09 of its total potential returns per unit of risk. Tikehau Capital is currently generating about -0.01 per unit of volatility. If you would invest 2,140 in Tikehau Capital on August 30, 2024 and sell it today you would lose (70.00) from holding Tikehau Capital or give up 3.27% 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. Tikehau Capital
Performance |
| Timeline |
| SPIE SA |
| Tikehau Capital |
SPIE SA and Tikehau Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPIE SA and Tikehau Capital
The main advantage of trading using opposite SPIE SA and Tikehau Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPIE SA position performs unexpectedly, Tikehau Capital 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 Tikehau Capital will offset losses from the drop in Tikehau Capital's long position.The idea behind SPIE SA and Tikehau Capital 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.| Tikehau Capital vs. Eurazeo | Tikehau Capital vs. Wendel | Tikehau Capital vs. SPIE SA | Tikehau Capital vs. Amundi 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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