Correlation Between Centrale DAchat and Damartex

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

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

Diversification Opportunities for Centrale DAchat and Damartex

0.32

Correlation Coefficient

Centrale DAchat  Damartex

Weak diversification

The 3 months correlation between Centrale and Damartex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Centrale dAchat Franaise and Damartex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damartex and Centrale DAchat 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 Centrale dAchat Franaise are associated (or correlated) with Damartex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damartex has no effect on the direction of Centrale DAchat i.e., Centrale DAchat and Damartex go up and down completely randomly.

Pair Corralation between Centrale DAchat and Damartex

Assuming the 90 days trading horizon Centrale dAchat Franaise is expected to generate 0.59 times more return on investment than Damartex. However, Centrale dAchat Franaise is 1.69 times less risky than Damartex. It trades about -0.02 of its potential returns per unit of risk. Damartex is currently generating about -0.05 per unit of risk. If you would invest  1,017  in Centrale dAchat Franaise on September 28, 2024 and sell it today you would lose (243.00) from holding Centrale dAchat Franaise or give up 23.89% of portfolio value over 90 days.

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

Centrale dAchat Franaise  vs.  Damartex

Centrale dAchat Franaise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centrale dAchat Franaise 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.

Damartex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Damartex has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Damartex 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 Centrale DAchat and Damartex

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

The idea behind Centrale dAchat Franaise and Damartex 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.