Correlation Between Aurea SA and Acanthe Dveloppement

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

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

Diversification Opportunities for Aurea SA and Acanthe Dveloppement

0.34

Correlation Coefficient

Aurea SA  Acanthe Dveloppement

Weak diversification

The 3 months correlation between Aurea and Acanthe is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Aurea SA and Acanthe Dveloppement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acanthe Dveloppement and Aurea SA 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 Aurea SA are associated (or correlated) with Acanthe Dveloppement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acanthe Dveloppement has no effect on the direction of Aurea SA i.e., Aurea SA and Acanthe Dveloppement go up and down completely randomly.

Pair Corralation between Aurea SA and Acanthe Dveloppement

Assuming the 90 days trading horizon Aurea SA is expected to under-perform the Acanthe Dveloppement. In addition to that, Aurea SA is 1.65 times more volatile than Acanthe Dveloppement. It trades about -0.22 of its total potential returns per unit of risk. Acanthe Dveloppement is currently generating about -0.14 per unit of volatility. If you would invest  33.00  in Acanthe Dveloppement on September 16, 2024 and sell it today you would lose (2.00) from holding Acanthe Dveloppement or give up 6.06% of portfolio value over 90 days.

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

Aurea SA  vs.  Acanthe Dveloppement

Aurea SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aurea SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aurea SA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Acanthe Dveloppement

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acanthe Dveloppement 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 Aurea SA and Acanthe Dveloppement

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

The idea behind Aurea SA and Acanthe Dveloppement 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.