Correlation Between Chargeurs and Delfingen

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

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

Diversification Opportunities for Chargeurs and Delfingen

0.71

Correlation Coefficient

Chargeurs  Delfingen

Poor diversification

The 3 months correlation between Chargeurs and Delfingen is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chargeurs SA and Delfingen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delfingen and Chargeurs 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 Chargeurs SA are associated (or correlated) with Delfingen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delfingen has no effect on the direction of Chargeurs i.e., Chargeurs and Delfingen go up and down completely randomly.

Pair Corralation between Chargeurs and Delfingen

Assuming the 90 days trading horizon Chargeurs SA is expected to under-perform the Delfingen. But the stock apears to be less risky and, when comparing its historical volatility, Chargeurs SA is 1.48 times less risky than Delfingen. The stock trades about 0.0 of its potential returns per unit of risk. The Delfingen is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  1,290  in Delfingen on October 11, 2024 and sell it today you would earn a total of  360.00  from holding Delfingen or generate 27.91% return on investment over 90 days.

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

Chargeurs SA  vs.  Delfingen

Chargeurs SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chargeurs SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Delfingen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delfingen has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Delfingen is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Chargeurs and Delfingen

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

The idea behind Chargeurs SA and Delfingen 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.