Correlation Between Icade SA and Financiere Marjos

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

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

Diversification Opportunities for Icade SA and Financiere Marjos

0.08

Correlation Coefficient

Icade SA  Financiere Marjos

Significant diversification

The 3 months correlation between Icade and Financiere is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Icade SA and Financiere Marjos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiere Marjos and Icade SA 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 Icade SA are associated (or correlated) with Financiere Marjos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiere Marjos has no effect on the direction of Icade SA i.e., Icade SA and Financiere Marjos go up and down completely randomly.

Pair Corralation between Icade SA and Financiere Marjos

Assuming the 90 days trading horizon Icade SA is expected to generate 0.31 times more return on investment than Financiere Marjos. However, Icade SA is 3.21 times less risky than Financiere Marjos. It trades about 0.03 of its potential returns per unit of risk. Financiere Marjos SA is currently generating about -0.04 per unit of risk. If you would invest  1,988  in Icade SA on December 25, 2024 and sell it today you would earn a total of  60.00  from holding Icade SA or generate 3.02% return on investment over 90 days.

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

Icade SA  vs.  Financiere Marjos SA

Icade SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Icade SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Icade SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Financiere Marjos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Financiere Marjos SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Icade SA and Financiere Marjos

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

The idea behind Icade SA and Financiere Marjos 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.

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 Stocks Directory module to find actively traded stocks across global markets.