Correlation Between Ipsos SA and Television Francaise

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

By analyzing existing cross correlation between Ipsos SA and Television Francaise 1, you can compare the effects of market volatilities on Ipsos SA and Television Francaise 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 Ipsos SA with a short position of Television Francaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ipsos SA and Television Francaise.

Diversification Opportunities for Ipsos SA and Television Francaise

0.3

Correlation Coefficient

Ipsos SA  Television Francaise

Weak diversification

The 3 months correlation between Ipsos and Television is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ipsos SA and Television Francaise 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Television Francaise and Ipsos 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 Ipsos SA are associated (or correlated) with Television Francaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Television Francaise has no effect on the direction of Ipsos SA i.e., Ipsos SA and Television Francaise go up and down completely randomly.

Pair Corralation between Ipsos SA and Television Francaise

Assuming the 90 days trading horizon Ipsos SA is expected to generate 1.03 times less return on investment than Television Francaise. In addition to that, Ipsos SA is 1.45 times more volatile than Television Francaise 1. It trades about 0.13 of its total potential returns per unit of risk. Television Francaise 1 is currently generating about 0.2 per unit of volatility. If you would invest  703.00  in Television Francaise 1 on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Television Francaise 1 or generate 14.22% return on investment over 90 days.

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

Ipsos SA  vs.  Television Francaise 1

Ipsos SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ipsos SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ipsos SA sustained solid returns over the last few months and may actually be approaching a breakup point.

Television Francaise

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Television Francaise 1 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Television Francaise sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ipsos SA and Television Francaise

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

The idea behind Ipsos SA and Television Francaise 1 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.