Correlation Between Patrimoine and Immobiliere Dassault

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

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

Diversification Opportunities for Patrimoine and Immobiliere Dassault

-0.21

Correlation Coefficient

Patrimoine  Immobiliere Dassault

Very good diversification

The 3 months correlation between Patrimoine and Immobiliere is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Patrimoine et Commerce and Immobiliere Dassault SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobiliere Dassault and Patrimoine 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 Patrimoine et Commerce are associated (or correlated) with Immobiliere Dassault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobiliere Dassault has no effect on the direction of Patrimoine i.e., Patrimoine and Immobiliere Dassault go up and down completely randomly.

Pair Corralation between Patrimoine and Immobiliere Dassault

Assuming the 90 days trading horizon Patrimoine et Commerce is expected to under-perform the Immobiliere Dassault. But the stock apears to be less risky and, when comparing its historical volatility, Patrimoine et Commerce is 2.07 times less risky than Immobiliere Dassault. The stock trades about -0.16 of its potential returns per unit of risk. The Immobiliere Dassault SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5,140  in Immobiliere Dassault SA on September 13, 2024 and sell it today you would lose (80.00) from holding Immobiliere Dassault SA or give up 1.56% of portfolio value over 90 days.

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

Patrimoine et Commerce  vs.  Immobiliere Dassault SA

Patrimoine et Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patrimoine et Commerce 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.

Immobiliere Dassault

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Patrimoine and Immobiliere Dassault

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

The idea behind Patrimoine et Commerce and Immobiliere Dassault 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.