Correlation Between Stradim Espace and Covivio SA

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

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

Diversification Opportunities for Stradim Espace and Covivio SA

0.63

Correlation Coefficient

Stradim Espace  Covivio SA

Poor diversification

The 3 months correlation between Stradim and Covivio is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Stradim Espace Finances and Covivio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Covivio SA and Stradim Espace 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 Stradim Espace Finances are associated (or correlated) with Covivio SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Covivio SA has no effect on the direction of Stradim Espace i.e., Stradim Espace and Covivio SA go up and down completely randomly.

Pair Corralation between Stradim Espace and Covivio SA

Assuming the 90 days trading horizon Stradim Espace is expected to generate 5.08 times less return on investment than Covivio SA. In addition to that, Stradim Espace is 2.96 times more volatile than Covivio SA. It trades about 0.01 of its total potential returns per unit of risk. Covivio SA is currently generating about 0.12 per unit of volatility. If you would invest  4,818  in Covivio SA on October 20, 2024 and sell it today you would earn a total of  144.00  from holding Covivio SA or generate 2.99% return on investment over 90 days.

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

Stradim Espace Finances  vs.  Covivio SA

Stradim Espace Finances

Risk-Adjusted Performance

0 of 100

Very Weak

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

Covivio SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Covivio SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Stradim Espace and Covivio SA

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

The idea behind Stradim Espace Finances and Covivio 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.