Correlation Between Immobiliere Dassault and Mercialys

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

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

Diversification Opportunities for Immobiliere Dassault and Mercialys

-0.1

Correlation Coefficient

Immobiliere Dassault  Mercialys

Good diversification

The 3 months correlation between Immobiliere and Mercialys is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Immobiliere Dassault SA and Mercialys SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercialys SA and Immobiliere Dassault 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 Immobiliere Dassault SA are associated (or correlated) with Mercialys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercialys SA has no effect on the direction of Immobiliere Dassault i.e., Immobiliere Dassault and Mercialys go up and down completely randomly.

Pair Corralation between Immobiliere Dassault and Mercialys

Assuming the 90 days trading horizon Immobiliere Dassault SA is expected to generate 1.01 times more return on investment than Mercialys. However, Immobiliere Dassault is 1.01 times more volatile than Mercialys SA. It trades about 0.04 of its potential returns per unit of risk. Mercialys SA is currently generating about -0.11 per unit of risk. If you would invest  5,000  in Immobiliere Dassault SA on October 24, 2024 and sell it today you would earn a total of  160.00  from holding Immobiliere Dassault SA or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Immobiliere Dassault SA  vs.  Mercialys SA

Immobiliere Dassault

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immobiliere Dassault SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Immobiliere Dassault is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mercialys SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mercialys SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Immobiliere Dassault and Mercialys

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

The idea behind Immobiliere Dassault SA and Mercialys 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.