Correlation Between Infotel SA and Aubay Socit

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

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

Diversification Opportunities for Infotel SA and Aubay Socit

0.59

Correlation Coefficient

Infotel SA  Aubay Socit

Very weak diversification

The 3 months correlation between Infotel and Aubay is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Infotel SA and Aubay Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aubay Socit Anonyme and Infotel 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 Infotel SA are associated (or correlated) with Aubay Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aubay Socit Anonyme has no effect on the direction of Infotel SA i.e., Infotel SA and Aubay Socit go up and down completely randomly.

Pair Corralation between Infotel SA and Aubay Socit

Assuming the 90 days trading horizon Infotel SA is expected to generate 1.77 times less return on investment than Aubay Socit. In addition to that, Infotel SA is 1.32 times more volatile than Aubay Socit Anonyme. It trades about 0.03 of its total potential returns per unit of risk. Aubay Socit Anonyme is currently generating about 0.07 per unit of volatility. If you would invest  4,505  in Aubay Socit Anonyme on December 30, 2024 and sell it today you would earn a total of  295.00  from holding Aubay Socit Anonyme or generate 6.55% return on investment over 90 days.

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

Infotel SA  vs.  Aubay Socit Anonyme

Infotel SA

Risk-Adjusted Performance

Weak

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

Aubay Socit Anonyme

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aubay Socit Anonyme are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Aubay Socit may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Infotel SA and Aubay Socit

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

The idea behind Infotel SA and Aubay Socit Anonyme 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.