Correlation Between Assystem and Wendel

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

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

Diversification Opportunities for Assystem and Wendel

0.0

Correlation Coefficient

Assystem  Wendel

Pay attention - limited upside

The 3 months correlation between Assystem and Wendel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Assystem SA and Wendel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wendel and Assystem 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 Assystem SA are associated (or correlated) with Wendel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wendel has no effect on the direction of Assystem i.e., Assystem and Wendel go up and down completely randomly.

Pair Corralation between Assystem and Wendel

Assuming the 90 days trading horizon Assystem SA is expected to under-perform the Wendel. In addition to that, Assystem is 2.47 times more volatile than Wendel. It trades about -0.11 of its total potential returns per unit of risk. Wendel is currently generating about -0.02 per unit of volatility. If you would invest  9,270  in Wendel on December 30, 2024 and sell it today you would lose (195.00) from holding Wendel or give up 2.1% of portfolio value over 90 days.

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

Assystem SA  vs.  Wendel

Assystem SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assystem SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Wendel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wendel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wendel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Assystem and Wendel

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

The idea behind Assystem SA and Wendel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.