Correlation Between Veolia Environnement and Ecclesiastical Insurance

Can any of the company-specific risk be diversified away by investing in both Veolia Environnement and Ecclesiastical Insurance 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 Ecclesiastical Insurance 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 Ecclesiastical Insurance Office, you can compare the effects of market volatilities on Veolia Environnement and Ecclesiastical Insurance 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 Ecclesiastical Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Veolia Environnement and Ecclesiastical Insurance.

Diversification Opportunities for Veolia Environnement and Ecclesiastical Insurance

0.16

Correlation Coefficient

Veolia Environnement  Ecclesiastical Insurance

Average diversification

The 3 months correlation between Veolia and Ecclesiastical is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Veolia Environnement VE and Ecclesiastical Insurance Offic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecclesiastical Insurance 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 Ecclesiastical Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecclesiastical Insurance has no effect on the direction of Veolia Environnement i.e., Veolia Environnement and Ecclesiastical Insurance go up and down completely randomly.

Pair Corralation between Veolia Environnement and Ecclesiastical Insurance

Assuming the 90 days trading horizon Veolia Environnement is expected to generate 1.59 times less return on investment than Ecclesiastical Insurance. But when comparing it to its historical volatility, Veolia Environnement VE is 1.01 times less risky than Ecclesiastical Insurance. It trades about 0.05 of its potential returns per unit of risk. Ecclesiastical Insurance Office is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12,970  in Ecclesiastical Insurance Office on November 29, 2024 and sell it today you would earn a total of  630.00  from holding Ecclesiastical Insurance Office or generate 4.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Veolia Environnement VE  vs.  Ecclesiastical Insurance Offic

Veolia Environnement

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Veolia Environnement VE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Veolia Environnement is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ecclesiastical Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ecclesiastical Insurance Office are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ecclesiastical Insurance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Veolia Environnement and Ecclesiastical Insurance

The main advantage of trading using opposite Veolia Environnement and Ecclesiastical Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Veolia Environnement position performs unexpectedly, Ecclesiastical Insurance 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 Ecclesiastical Insurance will offset losses from the drop in Ecclesiastical Insurance's long position.

The idea behind Veolia Environnement VE and Ecclesiastical Insurance Office 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.