Correlation Between Derichebourg and VANTIVA SA

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

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

Diversification Opportunities for Derichebourg and VANTIVA SA

-0.05

Correlation Coefficient

Derichebourg  VANTIVA SA

Good diversification

The 3 months correlation between Derichebourg and VANTIVA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and VANTIVA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VANTIVA SA and Derichebourg 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 Derichebourg are associated (or correlated) with VANTIVA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VANTIVA SA has no effect on the direction of Derichebourg i.e., Derichebourg and VANTIVA SA go up and down completely randomly.

Pair Corralation between Derichebourg and VANTIVA SA

Assuming the 90 days trading horizon Derichebourg is expected to generate 1.12 times more return on investment than VANTIVA SA. However, Derichebourg is 1.12 times more volatile than VANTIVA SA. It trades about 0.22 of its potential returns per unit of risk. VANTIVA SA is currently generating about -0.11 per unit of risk. If you would invest  452.00  in Derichebourg on September 28, 2024 and sell it today you would earn a total of  71.00  from holding Derichebourg or generate 15.71% return on investment over 90 days.

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

Derichebourg  vs.  VANTIVA SA

Derichebourg

Risk-Adjusted Performance

0 of 100

Very Weak

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

VANTIVA SA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VANTIVA SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, VANTIVA SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Derichebourg and VANTIVA SA

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

The idea behind Derichebourg and VANTIVA SA 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.