Correlation Between Elior SCA and Maisons Du

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

By analyzing existing cross correlation between Elior SCA and Maisons du Monde, you can compare the effects of market volatilities on Elior SCA and Maisons Du 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 Elior SCA with a short position of Maisons Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elior SCA and Maisons Du.

Diversification Opportunities for Elior SCA and Maisons Du

0.27

Correlation Coefficient

Elior SCA  Maisons Du

Modest diversification

The 3 months correlation between Elior and Maisons is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Elior SCA and Maisons du Monde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maisons du Monde and Elior SCA 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 Elior SCA are associated (or correlated) with Maisons Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maisons du Monde has no effect on the direction of Elior SCA i.e., Elior SCA and Maisons Du go up and down completely randomly.

Pair Corralation between Elior SCA and Maisons Du

Assuming the 90 days trading horizon Elior SCA is expected to under-perform the Maisons Du. In addition to that, Elior SCA is 1.44 times more volatile than Maisons du Monde. It trades about -0.09 of its total potential returns per unit of risk. Maisons du Monde is currently generating about 0.08 per unit of volatility. If you would invest  380.00  in Maisons du Monde on September 16, 2024 and sell it today you would earn a total of  48.00  from holding Maisons du Monde or generate 12.63% return on investment over 90 days.

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

Elior SCA  vs.  Maisons du Monde

Elior SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elior SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Maisons du Monde

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maisons du Monde are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Maisons Du sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elior SCA and Maisons Du

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

The idea behind Elior SCA and Maisons du Monde 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.