Correlation Between Cnova NV and Believe SAS
Can any of the company-specific risk be diversified away by investing in both Cnova NV and Believe SAS 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 Cnova NV and Believe SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cnova NV and Believe SAS, you can compare the effects of market volatilities on Cnova NV and Believe SAS 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 Cnova NV with a short position of Believe SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cnova NV and Believe SAS.
Diversification Opportunities for Cnova NV and Believe SAS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cnova and Believe is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cnova NV and Believe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Believe SAS and Cnova NV 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 Cnova NV are associated (or correlated) with Believe SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Believe SAS has no effect on the direction of Cnova NV i.e., Cnova NV and Believe SAS go up and down completely randomly.
Pair Corralation between Cnova NV and Believe SAS
Assuming the 90 days trading horizon Cnova NV is expected to generate 12.98 times more return on investment than Believe SAS. However, Cnova NV is 12.98 times more volatile than Believe SAS. It trades about 0.04 of its potential returns per unit of risk. Believe SAS is currently generating about -0.06 per unit of risk. If you would invest 35.00 in Cnova NV on October 25, 2024 and sell it today you would lose (24.00) from holding Cnova NV or give up 68.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cnova NV vs. Believe SAS
Performance |
Timeline |
Cnova NV |
Believe SAS |
Cnova NV and Believe SAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cnova NV and Believe SAS
The main advantage of trading using opposite Cnova NV and Believe SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cnova NV position performs unexpectedly, Believe SAS 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 Believe SAS will offset losses from the drop in Believe SAS's long position.Cnova NV vs. Casino Guichard Perrachon | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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