Correlation Between Centrale DAchat and Ferm Casino

Can any of the company-specific risk be diversified away by investing in both Centrale DAchat and Ferm Casino 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 Ferm Casino 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 Ferm Casino Mun, you can compare the effects of market volatilities on Centrale DAchat and Ferm Casino 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 Ferm Casino. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrale DAchat and Ferm Casino.

Diversification Opportunities for Centrale DAchat and Ferm Casino

0.13

Correlation Coefficient

Centrale DAchat  Ferm Casino

Average diversification

The 3 months correlation between Centrale and Ferm is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Centrale dAchat Franaise and Ferm Casino Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferm Casino Mun 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 Ferm Casino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferm Casino Mun has no effect on the direction of Centrale DAchat i.e., Centrale DAchat and Ferm Casino go up and down completely randomly.

Pair Corralation between Centrale DAchat and Ferm Casino

Assuming the 90 days trading horizon Centrale dAchat Franaise is expected to generate 0.45 times more return on investment than Ferm Casino. However, Centrale dAchat Franaise is 2.23 times less risky than Ferm Casino. It trades about 0.02 of its potential returns per unit of risk. Ferm Casino Mun is currently generating about -0.01 per unit of risk. If you would invest  782.00  in Centrale dAchat Franaise on December 28, 2024 and sell it today you would earn a total of  8.00  from holding Centrale dAchat Franaise or generate 1.02% return on investment over 90 days.

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

Centrale dAchat Franaise  vs.  Ferm Casino Mun

Centrale dAchat Franaise

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centrale dAchat Franaise are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Centrale DAchat is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ferm Casino Mun

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Centrale DAchat and Ferm Casino

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

The idea behind Centrale dAchat Franaise and Ferm Casino Mun 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.