Correlation Between Veolia Environnement and Stellantis
Can any of the company-specific risk be diversified away by investing in both Veolia Environnement and Stellantis 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 Veolia Environnement and Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Veolia Environnement VE and Stellantis NV, you can compare the effects of market volatilities on Veolia Environnement and Stellantis 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 Veolia Environnement with a short position of Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Stellantis.
Diversification Opportunities for Veolia Environnement and Stellantis
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Veolia and Stellantis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV and Veolia Environnement 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 Veolia Environnement VE are associated (or correlated) with Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and Stellantis go up and down completely randomly.
Pair Corralation between Veolia Environnement and Stellantis
Assuming the 90 days trading horizon Veolia Environnement VE is expected to generate 0.54 times more return on investment than Stellantis. However, Veolia Environnement VE is 1.85 times less risky than Stellantis. It trades about -0.08 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.15 per unit of risk. If you would invest 3,112 in Veolia Environnement VE on September 3, 2024 and sell it today you would lose (379.00) from holding Veolia Environnement VE or give up 12.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Veolia Environnement VE vs. Stellantis NV
Performance |
| Timeline |
| Veolia Environnement |
| Stellantis NV |
Veolia Environnement and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Veolia Environnement and Stellantis
The main advantage of trading using opposite Veolia Environnement and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Veolia Environnement vs. Vinci SA | Veolia Environnement vs. Compagnie de Saint Gobain | Veolia Environnement vs. Bouygues SA | Veolia Environnement vs. Engie SA |
| Stellantis vs. Exail Technologies SA | Stellantis vs. Gaztransport Technigaz SAS | Stellantis vs. Onlineformapro SA | Stellantis vs. Novatech Industries 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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