Correlation Between Vivendi SA and Accor S
Can any of the company-specific risk be diversified away by investing in both Vivendi SA 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 Vivendi SA and Accor S into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SA and Accor S A, you can compare the effects of market volatilities on Vivendi SA 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 Vivendi SA with a short position of Accor S. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SA and Accor S.
Diversification Opportunities for Vivendi SA and Accor S
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vivendi and Accor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA 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 Vivendi 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 Vivendi SA 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 Vivendi SA i.e., Vivendi SA and Accor S go up and down completely randomly.
Pair Corralation between Vivendi SA and Accor S
Assuming the 90 days trading horizon Vivendi SA is expected to generate 9.8 times less return on investment than Accor S. But when comparing it to its historical volatility, Vivendi SA is 1.1 times less risky than Accor S. It trades about 0.01 of its potential returns per unit of risk. Accor S A is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,352 in Accor S A on September 2, 2024 and sell it today you would earn a total of 2,016 from holding Accor S A or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivendi SA vs. Accor S A
Performance |
| Timeline |
| Vivendi SA |
| Accor S A |
Vivendi SA and Accor S Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivendi SA and Accor S
The main advantage of trading using opposite Vivendi SA and Accor S positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SA 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.| Vivendi SA vs. Vinci SA | Vivendi SA vs. Compagnie de Saint Gobain | Vivendi SA vs. Bouygues SA | Vivendi SA vs. Carrefour 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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