Correlation Between Accor S and Pierre Et

Can any of the company-specific risk be diversified away by investing in both Accor S and Pierre Et 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 Accor S and Pierre Et into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Accor S A and Pierre et Vacances, you can compare the effects of market volatilities on Accor S and Pierre Et 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 Accor S with a short position of Pierre Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accor S and Pierre Et.

Diversification Opportunities for Accor S and Pierre Et

0.59

Correlation Coefficient

Accor S  Pierre Et

Very weak diversification

The 3 months correlation between Accor and Pierre is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Accor S A and Pierre et Vacances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pierre et Vacances and Accor S 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 Accor S A are associated (or correlated) with Pierre Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pierre et Vacances has no effect on the direction of Accor S i.e., Accor S and Pierre Et go up and down completely randomly.

Pair Corralation between Accor S and Pierre Et

Assuming the 90 days horizon Accor S is expected to generate 3.23 times less return on investment than Pierre Et. But when comparing it to its historical volatility, Accor S A is 2.08 times less risky than Pierre Et. It trades about 0.25 of its potential returns per unit of risk. Pierre et Vacances is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  140.00  in Pierre et Vacances on October 24, 2024 and sell it today you would earn a total of  19.00  from holding Pierre et Vacances or generate 13.57% return on investment over 90 days.

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

Accor S A  vs.  Pierre et Vacances

Accor S A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Accor S A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accor S sustained solid returns over the last few months and may actually be approaching a breakup point.

Pierre et Vacances

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pierre et Vacances are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Pierre Et sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accor S and Pierre Et

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

The idea behind Accor S A and Pierre et Vacances 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.