Correlation Between Seven I and Carrefour
Can any of the company-specific risk be diversified away by investing in both Seven I 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 Seven I and Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and Carrefour SA PK, you can compare the effects of market volatilities on Seven I 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 Seven I with a short position of Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Carrefour.
Diversification Opportunities for Seven I and Carrefour
Excellent diversification
The 3 months correlation between Seven and Carrefour is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Carrefour SA PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA PK and Seven I 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 Seven i Holdings 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 PK has no effect on the direction of Seven I i.e., Seven I and Carrefour go up and down completely randomly.
Pair Corralation between Seven I and Carrefour
Assuming the 90 days horizon Seven i Holdings is expected to under-perform the Carrefour. But the pink sheet apears to be less risky and, when comparing its historical volatility, Seven i Holdings is 1.58 times less risky than Carrefour. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Carrefour SA PK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Carrefour SA PK on October 24, 2024 and sell it today you would earn a total of 3.00 from holding Carrefour SA PK or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. Carrefour SA PK
Performance |
| Timeline |
| Seven i Holdings |
| Carrefour SA PK |
Seven I and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Carrefour
The main advantage of trading using opposite Seven I and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I 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.The idea behind Seven i Holdings and Carrefour SA PK 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.| Carrefour vs. Kesko Oyj ADR | Carrefour vs. Carrefour SA | Carrefour vs. J Sainsbury plc | Carrefour vs. Om Holdings International |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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