Correlation Between Moulinvest and Voltalia

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

By analyzing existing cross correlation between Moulinvest and Voltalia SA, you can compare the effects of market volatilities on Moulinvest and Voltalia 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 Moulinvest with a short position of Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moulinvest and Voltalia.

Diversification Opportunities for Moulinvest and Voltalia

0.5

Correlation Coefficient

Moulinvest  Voltalia

Very weak diversification

The 3 months correlation between Moulinvest and Voltalia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Moulinvest and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA and Moulinvest 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 Moulinvest are associated (or correlated) with Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Moulinvest i.e., Moulinvest and Voltalia go up and down completely randomly.

Pair Corralation between Moulinvest and Voltalia

Assuming the 90 days trading horizon Moulinvest is expected to under-perform the Voltalia. But the stock apears to be less risky and, when comparing its historical volatility, Moulinvest is 2.11 times less risky than Voltalia. The stock trades about -0.12 of its potential returns per unit of risk. The Voltalia SA is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  793.00  in Voltalia SA on September 2, 2024 and sell it today you would lose (25.00) from holding Voltalia SA or give up 3.15% of portfolio value over 90 days.

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

Moulinvest  vs.  Voltalia SA

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Voltalia SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voltalia SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Voltalia is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Moulinvest and Voltalia

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

The idea behind Moulinvest and Voltalia SA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.