Correlation Between IDI SCA and Assystem

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

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

Diversification Opportunities for IDI SCA and Assystem

0.31

Correlation Coefficient

IDI SCA  Assystem

Weak diversification

The 3 months correlation between IDI and Assystem is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding IDI SCA and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and IDI 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 IDI SCA are associated (or correlated) with Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of IDI SCA i.e., IDI SCA and Assystem go up and down completely randomly.

Pair Corralation between IDI SCA and Assystem

Assuming the 90 days trading horizon IDI SCA is expected to generate 0.27 times more return on investment than Assystem. However, IDI SCA is 3.67 times less risky than Assystem. It trades about 0.21 of its potential returns per unit of risk. Assystem SA is currently generating about 0.04 per unit of risk. If you would invest  6,760  in IDI SCA on November 29, 2024 and sell it today you would earn a total of  720.00  from holding IDI SCA or generate 10.65% return on investment over 90 days.

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

IDI SCA  vs.  Assystem SA

IDI SCA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IDI SCA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IDI SCA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Assystem SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Assystem SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Assystem may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with IDI SCA and Assystem

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

The idea behind IDI SCA and Assystem 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.