Correlation Between Voltalia and OVH Groupe
Can any of the company-specific risk be diversified away by investing in both Voltalia and OVH Groupe 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 OVH Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltalia SA and OVH Groupe SAS, you can compare the effects of market volatilities on Voltalia and OVH Groupe 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 OVH Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltalia and OVH Groupe.
Diversification Opportunities for Voltalia and OVH Groupe
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voltalia and OVH is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Voltalia SA and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe 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 OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of Voltalia i.e., Voltalia and OVH Groupe go up and down completely randomly.
Pair Corralation between Voltalia and OVH Groupe
Assuming the 90 days trading horizon Voltalia SA is expected to generate 1.02 times more return on investment than OVH Groupe. However, Voltalia is 1.02 times more volatile than OVH Groupe SAS. It trades about 0.51 of its potential returns per unit of risk. OVH Groupe SAS is currently generating about -0.19 per unit of risk. If you would invest 662.00 in Voltalia SA on November 28, 2024 and sell it today you would earn a total of 141.00 from holding Voltalia SA or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voltalia SA vs. OVH Groupe SAS
Performance |
| Timeline |
| Voltalia SA |
| OVH Groupe SAS |
Voltalia and OVH Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voltalia and OVH Groupe
The main advantage of trading using opposite Voltalia and OVH Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltalia position performs unexpectedly, OVH Groupe 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 OVH Groupe will offset losses from the drop in OVH Groupe's long position.The idea behind Voltalia SA and OVH Groupe 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.| OVH Groupe vs. La Francaise Des | OVH Groupe vs. TotalEnergies SE | OVH Groupe vs. Worldline SA | OVH Groupe vs. Atos SE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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