Correlation Between CREDIT IMMOBILIER and HIGHTECH PAYMENT

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

By analyzing existing cross correlation between CREDIT IMMOBILIER ET and HIGHTECH PAYMENT SYSTEMS, you can compare the effects of market volatilities on CREDIT IMMOBILIER and HIGHTECH PAYMENT 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 CREDIT IMMOBILIER with a short position of HIGHTECH PAYMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CREDIT IMMOBILIER and HIGHTECH PAYMENT.

Diversification Opportunities for CREDIT IMMOBILIER and HIGHTECH PAYMENT

-0.28

Correlation Coefficient

CREDIT IMMOBILIER  HIGHTECH PAYMENT

Very good diversification

The 3 months correlation between CREDIT and HIGHTECH is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT IMMOBILIER ET and HIGHTECH PAYMENT SYSTEMS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIGHTECH PAYMENT SYSTEMS and CREDIT IMMOBILIER 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 CREDIT IMMOBILIER ET are associated (or correlated) with HIGHTECH PAYMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIGHTECH PAYMENT SYSTEMS has no effect on the direction of CREDIT IMMOBILIER i.e., CREDIT IMMOBILIER and HIGHTECH PAYMENT go up and down completely randomly.

Pair Corralation between CREDIT IMMOBILIER and HIGHTECH PAYMENT

Assuming the 90 days trading horizon CREDIT IMMOBILIER ET is expected to generate 1.07 times more return on investment than HIGHTECH PAYMENT. However, CREDIT IMMOBILIER is 1.07 times more volatile than HIGHTECH PAYMENT SYSTEMS. It trades about 0.0 of its potential returns per unit of risk. HIGHTECH PAYMENT SYSTEMS is currently generating about -0.06 per unit of risk. If you would invest  41,200  in CREDIT IMMOBILIER ET on September 12, 2024 and sell it today you would lose (200.00) from holding CREDIT IMMOBILIER ET or give up 0.49% of portfolio value over 90 days.

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

CREDIT IMMOBILIER ET  vs.  HIGHTECH PAYMENT SYSTEMS

CREDIT IMMOBILIER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREDIT IMMOBILIER ET has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, CREDIT IMMOBILIER is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

HIGHTECH PAYMENT SYSTEMS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HIGHTECH PAYMENT SYSTEMS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HIGHTECH PAYMENT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CREDIT IMMOBILIER and HIGHTECH PAYMENT

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

The idea behind CREDIT IMMOBILIER ET and HIGHTECH PAYMENT SYSTEMS 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.