Correlation Between Manitou BF and Accor S

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

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

Diversification Opportunities for Manitou BF and Accor S

-0.5

Correlation Coefficient

Manitou BF  Accor S

Very good diversification

The 3 months correlation between Manitou and Accor is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Accor S A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor S A and Manitou BF 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 Manitou BF SA are associated (or correlated) with Accor S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor S A has no effect on the direction of Manitou BF i.e., Manitou BF and Accor S go up and down completely randomly.

Pair Corralation between Manitou BF and Accor S

Assuming the 90 days trading horizon Manitou BF is expected to generate 1.08 times less return on investment than Accor S. In addition to that, Manitou BF is 1.62 times more volatile than Accor S A. It trades about 0.17 of its total potential returns per unit of risk. Accor S A is currently generating about 0.29 per unit of volatility. If you would invest  4,368  in Accor S A on September 30, 2024 and sell it today you would earn a total of  307.00  from holding Accor S A or generate 7.03% return on investment over 90 days.

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

Manitou BF SA  vs.  Accor S A

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Accor S A

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Accor S A are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Accor S sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manitou BF and Accor S

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

The idea behind Manitou BF SA and Accor S A 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.