Correlation Between Carrefour and Veolia Environnement

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Carrefour and Veolia Environnement 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 Carrefour and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA and Veolia Environnement VE, you can compare the effects of market volatilities on Carrefour and Veolia Environnement 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 Carrefour with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Veolia Environnement.

Diversification Opportunities for Carrefour and Veolia Environnement

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Carrefour and Veolia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and Carrefour 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 Carrefour SA are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Carrefour i.e., Carrefour and Veolia Environnement go up and down completely randomly.

Pair Corralation between Carrefour and Veolia Environnement

Assuming the 90 days horizon Carrefour SA is expected to generate 0.75 times more return on investment than Veolia Environnement. However, Carrefour SA is 1.33 times less risky than Veolia Environnement. It trades about 0.05 of its potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.27 per unit of risk. If you would invest  1,444  in Carrefour SA on August 31, 2024 and sell it today you would earn a total of  12.00  from holding Carrefour SA or generate 0.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Carrefour SA  vs.  Veolia Environnement VE

 Performance 
       Timeline  
Carrefour SA 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

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

Carrefour and Veolia Environnement Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Carrefour and Veolia Environnement

The main advantage of trading using opposite Carrefour and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.
The idea behind Carrefour SA and Veolia Environnement VE 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Analyzer
Portfolio analysis module that provides access to portfolio diagnostics and optimization engine
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account