Correlation Between Voltalia and Aramis SAS
Can any of the company-specific risk be diversified away by investing in both Voltalia and Aramis SAS 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 Voltalia and Aramis SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltalia SA and Aramis SAS, you can compare the effects of market volatilities on Voltalia and Aramis SAS 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 Voltalia with a short position of Aramis SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltalia and Aramis SAS.
Diversification Opportunities for Voltalia and Aramis SAS
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Voltalia and Aramis is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Voltalia SA and Aramis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aramis SAS and Voltalia 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 Voltalia SA are associated (or correlated) with Aramis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aramis SAS has no effect on the direction of Voltalia i.e., Voltalia and Aramis SAS go up and down completely randomly.
Pair Corralation between Voltalia and Aramis SAS
Assuming the 90 days trading horizon Voltalia SA is expected to under-perform the Aramis SAS. In addition to that, Voltalia is 1.39 times more volatile than Aramis SAS. It trades about -0.21 of its total potential returns per unit of risk. Aramis SAS is currently generating about 0.31 per unit of volatility. If you would invest 635.00 in Aramis SAS on September 4, 2024 and sell it today you would earn a total of 107.00 from holding Aramis SAS or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voltalia SA vs. Aramis SAS
Performance |
| Timeline |
| Voltalia SA |
| Aramis SAS |
Voltalia and Aramis SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voltalia and Aramis SAS
The main advantage of trading using opposite Voltalia and Aramis SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltalia position performs unexpectedly, Aramis SAS 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 Aramis SAS will offset losses from the drop in Aramis SAS's long position.The idea behind Voltalia SA and Aramis SAS 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.| Aramis SAS vs. LVMH Mot Hennessy | Aramis SAS vs. LOreal SA | Aramis SAS vs. Hermes International SCA | Aramis SAS vs. Manitou BF 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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