Correlation Between Pierre Et and Les Hotels
Can any of the company-specific risk be diversified away by investing in both Pierre Et and Les Hotels 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 Les Hotels 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 Les Hotels Bav, you can compare the effects of market volatilities on Pierre Et and Les Hotels 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 Les Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pierre Et and Les Hotels.
Diversification Opportunities for Pierre Et and Les Hotels
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pierre and Les is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pierre et Vacances and Les Hotels Bav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Les Hotels Bav 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 Les Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Les Hotels Bav has no effect on the direction of Pierre Et i.e., Pierre Et and Les Hotels go up and down completely randomly.
Pair Corralation between Pierre Et and Les Hotels
Assuming the 90 days trading horizon Pierre et Vacances is expected to under-perform the Les Hotels. In addition to that, Pierre Et is 5.33 times more volatile than Les Hotels Bav. It trades about -0.21 of its total potential returns per unit of risk. Les Hotels Bav is currently generating about 0.09 per unit of volatility. If you would invest 7,150 in Les Hotels Bav on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Les Hotels Bav or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pierre et Vacances vs. Les Hotels Bav
Performance |
| Timeline |
| Pierre et Vacances |
| Les Hotels Bav |
Pierre Et and Les Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pierre Et and Les Hotels
The main advantage of trading using opposite Pierre Et and Les Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pierre Et position performs unexpectedly, Les Hotels 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 Les Hotels will offset losses from the drop in Les Hotels' long position.| Pierre Et vs. Les Hotels Bav | Pierre Et vs. Groupe Partouche SA | Pierre Et vs. Centrale dAchat Franaise | Pierre Et vs. Manitou BF SA |
| Les Hotels vs. Les Htels de | Les Hotels vs. Moulinvest | Les Hotels vs. Bernard Loisea | Les Hotels vs. Groupimo 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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