Correlation Between Pierre Et and Accor S
Can any of the company-specific risk be diversified away by investing in both Pierre Et and Accor S 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 Pierre Et and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pierre et Vacances and Accor S A, you can compare the effects of market volatilities on Pierre Et and Accor S 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 Pierre Et with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pierre Et and Accor S.
Diversification Opportunities for Pierre Et and Accor S
Good diversification
The 3 months correlation between Pierre and Accor is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pierre et Vacances and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Pierre Et 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 Pierre et Vacances are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Pierre Et i.e., Pierre Et and Accor S go up and down completely randomly.
Pair Corralation between Pierre Et and Accor S
Assuming the 90 days trading horizon Pierre Et is expected to generate 1.31 times less return on investment than Accor S. In addition to that, Pierre Et is 1.79 times more volatile than Accor S A. It trades about 0.04 of its total potential returns per unit of risk. Accor S A is currently generating about 0.08 per unit of volatility. If you would invest 2,446 in Accor S A on August 30, 2024 and sell it today you would earn a total of 1,770 from holding Accor S A or generate 72.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pierre et Vacances vs. Accor S A
Performance |
| Timeline |
| Pierre et Vacances |
| Accor S A |
Pierre Et and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pierre Et and Accor S
The main advantage of trading using opposite Pierre Et and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pierre Et position performs unexpectedly, Accor S 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 Accor S will offset losses from the drop in Accor S's long position.| Pierre Et vs. Accor S A | Pierre Et vs. Ferm Casino Mun | Pierre Et vs. Les Hotels Bav | Pierre Et vs. Hoteles Bestprice 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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