Correlation Between Speed Rabbit and Cnova NV

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

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

Diversification Opportunities for Speed Rabbit and Cnova NV

-0.47

Correlation Coefficient

Speed Rabbit  Cnova NV

Very good diversification

The 3 months correlation between Speed and Cnova is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Speed Rabbit Pizza and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV and Speed Rabbit 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 Speed Rabbit Pizza are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Speed Rabbit i.e., Speed Rabbit and Cnova NV go up and down completely randomly.

Pair Corralation between Speed Rabbit and Cnova NV

Assuming the 90 days trading horizon Speed Rabbit Pizza is expected to generate 0.54 times more return on investment than Cnova NV. However, Speed Rabbit Pizza is 1.86 times less risky than Cnova NV. It trades about 0.5 of its potential returns per unit of risk. Cnova NV is currently generating about -0.36 per unit of risk. If you would invest  1,300  in Speed Rabbit Pizza on October 10, 2024 and sell it today you would earn a total of  1,780  from holding Speed Rabbit Pizza or generate 136.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Speed Rabbit Pizza  vs.  Cnova NV

Speed Rabbit Pizza

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Speed Rabbit Pizza are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Speed Rabbit reported solid returns over the last few months and may actually be approaching a breakup point.

Cnova NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cnova NV 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Speed Rabbit and Cnova NV

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

The idea behind Speed Rabbit Pizza and Cnova NV 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.