Correlation Between Worldline and Imerys SA
Can any of the company-specific risk be diversified away by investing in both Worldline and Imerys SA 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 Worldline and Imerys SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldline SA and Imerys SA, you can compare the effects of market volatilities on Worldline and Imerys SA 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 Worldline with a short position of Imerys SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldline and Imerys SA.
Diversification Opportunities for Worldline and Imerys SA
Excellent diversification
The 3 months correlation between Worldline and Imerys is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Worldline SA and Imerys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imerys SA and Worldline 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 Worldline SA are associated (or correlated) with Imerys SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imerys SA has no effect on the direction of Worldline i.e., Worldline and Imerys SA go up and down completely randomly.
Pair Corralation between Worldline and Imerys SA
Assuming the 90 days trading horizon Worldline SA is expected to generate 1.64 times more return on investment than Imerys SA. However, Worldline is 1.64 times more volatile than Imerys SA. It trades about 0.1 of its potential returns per unit of risk. Imerys SA is currently generating about -0.04 per unit of risk. If you would invest 631.00 in Worldline SA on October 26, 2024 and sell it today you would earn a total of 134.00 from holding Worldline SA or generate 21.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldline SA vs. Imerys SA
Performance |
| Timeline |
| Worldline SA |
| Imerys SA |
Worldline and Imerys SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldline and Imerys SA
The main advantage of trading using opposite Worldline and Imerys SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldline position performs unexpectedly, Imerys SA 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 Imerys SA will offset losses from the drop in Imerys SA's long position.| Worldline vs. Atos SE | Worldline vs. Teleperformance SE | Worldline vs. Dassault Systemes SE | Worldline vs. Capgemini SE |
| Imerys SA vs. Rubis SCA | Imerys SA vs. Eramet SA | Imerys SA vs. Nexity | Imerys SA vs. Compagnie de Saint Gobain |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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