Correlation Between Fnac Darty and Believe SAS
Can any of the company-specific risk be diversified away by investing in both Fnac Darty 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 Fnac Darty and Believe SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fnac Darty SA and Believe SAS, you can compare the effects of market volatilities on Fnac Darty 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 Fnac Darty with a short position of Believe SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fnac Darty and Believe SAS.
Diversification Opportunities for Fnac Darty and Believe SAS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fnac and Believe is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fnac Darty SA and Believe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Believe SAS and Fnac Darty 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 Fnac Darty SA 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 Fnac Darty i.e., Fnac Darty and Believe SAS go up and down completely randomly.
Pair Corralation between Fnac Darty and Believe SAS
Assuming the 90 days trading horizon Fnac Darty SA is expected to generate 1.12 times more return on investment than Believe SAS. However, Fnac Darty is 1.12 times more volatile than Believe SAS. It trades about 0.06 of its potential returns per unit of risk. Believe SAS is currently generating about -0.06 per unit of risk. If you would invest 2,675 in Fnac Darty SA on October 25, 2024 and sell it today you would earn a total of 150.00 from holding Fnac Darty SA or generate 5.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fnac Darty SA vs. Believe SAS
Performance |
Timeline |
Fnac Darty SA |
Believe SAS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fnac Darty and Believe SAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fnac Darty and Believe SAS
The main advantage of trading using opposite Fnac Darty and Believe SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fnac Darty 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.Fnac Darty vs. Maisons du Monde | ||
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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