Correlation Between Exail Technologies and CAC Consumer

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

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

Diversification Opportunities for Exail Technologies and CAC Consumer

-0.42

Correlation Coefficient

Exail Technologies  CAC Consumer

Very good diversification

The 3 months correlation between Exail and CAC is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Exail Technologies SA and CAC Consumer Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAC Consumer Goods and Exail Technologies 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 Exail Technologies SA are associated (or correlated) with CAC Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAC Consumer Goods has no effect on the direction of Exail Technologies i.e., Exail Technologies and CAC Consumer go up and down completely randomly.

Pair Corralation between Exail Technologies and CAC Consumer

Assuming the 90 days trading horizon Exail Technologies SA is expected to generate 1.48 times more return on investment than CAC Consumer. However, Exail Technologies is 1.48 times more volatile than CAC Consumer Goods. It trades about 0.1 of its potential returns per unit of risk. CAC Consumer Goods is currently generating about 0.03 per unit of risk. If you would invest  1,732  in Exail Technologies SA on October 15, 2024 and sell it today you would earn a total of  200.00  from holding Exail Technologies SA or generate 11.55% return on investment over 90 days.

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

Exail Technologies SA  vs.  CAC Consumer Goods

Pair Trading with Exail Technologies and CAC Consumer

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

The idea behind Exail Technologies SA and CAC Consumer Goods 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.