Correlation Between Financiere Hoche and Aures Technologies

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

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

Diversification Opportunities for Financiere Hoche and Aures Technologies

0.48

Correlation Coefficient

Financiere Hoche  Aures Technologies

Very weak diversification

The 3 months correlation between Financiere and Aures is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Financiere Hoche Bains Les Bai and Aures Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aures Technologies and Financiere Hoche 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 Financiere Hoche Bains Les Bains are associated (or correlated) with Aures Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aures Technologies has no effect on the direction of Financiere Hoche i.e., Financiere Hoche and Aures Technologies go up and down completely randomly.

Pair Corralation between Financiere Hoche and Aures Technologies

Assuming the 90 days trading horizon Financiere Hoche Bains Les Bains is expected to generate 9.27 times more return on investment than Aures Technologies. However, Financiere Hoche is 9.27 times more volatile than Aures Technologies SA. It trades about 0.23 of its potential returns per unit of risk. Aures Technologies SA is currently generating about 0.04 per unit of risk. If you would invest  6,650  in Financiere Hoche Bains Les Bains on October 9, 2024 and sell it today you would earn a total of  650.00  from holding Financiere Hoche Bains Les Bains or generate 9.77% return on investment over 90 days.

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

Financiere Hoche Bains Les Bai  vs.  Aures Technologies SA

Financiere Hoche Bains

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Financiere Hoche Bains Les Bains are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Financiere Hoche is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Aures Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Financiere Hoche and Aures Technologies

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

The idea behind Financiere Hoche Bains Les Bains and Aures Technologies 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.