Correlation Between Wendel and Assystem

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

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

Diversification Opportunities for Wendel and Assystem

0.0

Correlation Coefficient

Wendel  Assystem

Pay attention - limited upside

The 3 months correlation between Wendel and Assystem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wendel and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and Wendel 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 Wendel 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 Wendel i.e., Wendel and Assystem go up and down completely randomly.

Pair Corralation between Wendel and Assystem

Assuming the 90 days horizon Wendel is expected to generate 0.41 times more return on investment than Assystem. However, Wendel is 2.47 times less risky than Assystem. It trades about -0.02 of its potential returns per unit of risk. Assystem SA is currently generating about -0.11 per unit of risk. If you would invest  9,270  in Wendel on December 30, 2024 and sell it today you would lose (195.00) from holding Wendel or give up 2.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wendel  vs.  Assystem SA

Wendel

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wendel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Wendel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Assystem SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assystem SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Wendel and Assystem

The main advantage of trading using opposite Wendel and Assystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wendel 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 Wendel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.