Correlation Between MED PAPER and CREDIT IMMOBILIER

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

By analyzing existing cross correlation between MED PAPER and CREDIT IMMOBILIER ET, you can compare the effects of market volatilities on MED PAPER and CREDIT IMMOBILIER 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 MED PAPER with a short position of CREDIT IMMOBILIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of MED PAPER and CREDIT IMMOBILIER.

Diversification Opportunities for MED PAPER and CREDIT IMMOBILIER

0.38

Correlation Coefficient

MED PAPER  CREDIT IMMOBILIER

Weak diversification

The 3 months correlation between MED and CREDIT is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MED PAPER and CREDIT IMMOBILIER ET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT IMMOBILIER and MED PAPER 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 MED PAPER are associated (or correlated) with CREDIT IMMOBILIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREDIT IMMOBILIER has no effect on the direction of MED PAPER i.e., MED PAPER and CREDIT IMMOBILIER go up and down completely randomly.

Pair Corralation between MED PAPER and CREDIT IMMOBILIER

Assuming the 90 days trading horizon MED PAPER is expected to generate 1.46 times more return on investment than CREDIT IMMOBILIER. However, MED PAPER is 1.46 times more volatile than CREDIT IMMOBILIER ET. It trades about 0.11 of its potential returns per unit of risk. CREDIT IMMOBILIER ET is currently generating about 0.04 per unit of risk. If you would invest  2,063  in MED PAPER on December 28, 2024 and sell it today you would earn a total of  337.00  from holding MED PAPER or generate 16.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

MED PAPER  vs.  CREDIT IMMOBILIER ET

MED PAPER

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MED PAPER are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MED PAPER reported solid returns over the last few months and may actually be approaching a breakup point.

CREDIT IMMOBILIER

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CREDIT IMMOBILIER ET are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, CREDIT IMMOBILIER is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MED PAPER and CREDIT IMMOBILIER

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

The idea behind MED PAPER and CREDIT IMMOBILIER ET 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 Stocks Directory module to find actively traded stocks across global markets.