Correlation Between CREDIT IMMOBILIER and SALAFIN

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

Diversification Opportunities for CREDIT IMMOBILIER and SALAFIN

0.2

Correlation Coefficient

CREDIT IMMOBILIER  SALAFIN

Modest diversification

The 3 months correlation between CREDIT and SALAFIN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT IMMOBILIER ET and SALAFIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALAFIN 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 SALAFIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALAFIN has no effect on the direction of CREDIT IMMOBILIER i.e., CREDIT IMMOBILIER and SALAFIN go up and down completely randomly.

Pair Corralation between CREDIT IMMOBILIER and SALAFIN

Assuming the 90 days trading horizon CREDIT IMMOBILIER is expected to generate 1.85 times less return on investment than SALAFIN. But when comparing it to its historical volatility, CREDIT IMMOBILIER ET is 1.48 times less risky than SALAFIN. It trades about 0.04 of its potential returns per unit of risk. SALAFIN is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  56,990  in SALAFIN on October 25, 2024 and sell it today you would earn a total of  2,810  from holding SALAFIN or generate 4.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

CREDIT IMMOBILIER ET  vs.  SALAFIN

CREDIT IMMOBILIER

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CREDIT IMMOBILIER ET are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, CREDIT IMMOBILIER is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SALAFIN

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SALAFIN are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SALAFIN is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CREDIT IMMOBILIER and SALAFIN

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

The idea behind CREDIT IMMOBILIER ET and SALAFIN 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.