Correlation Between Patrimoine and Selectirente

Can any of the company-specific risk be diversified away by investing in both Patrimoine and Selectirente 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 Selectirente 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 Selectirente, you can compare the effects of market volatilities on Patrimoine and Selectirente 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 Selectirente. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patrimoine and Selectirente.

Diversification Opportunities for Patrimoine and Selectirente

-0.52

Correlation Coefficient

Patrimoine  Selectirente

Excellent diversification

The 3 months correlation between Patrimoine and Selectirente is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Patrimoine et Commerce and Selectirente in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selectirente 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 Selectirente. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selectirente has no effect on the direction of Patrimoine i.e., Patrimoine and Selectirente go up and down completely randomly.

Pair Corralation between Patrimoine and Selectirente

Assuming the 90 days trading horizon Patrimoine et Commerce is expected to generate 2.01 times more return on investment than Selectirente. However, Patrimoine is 2.01 times more volatile than Selectirente. It trades about 0.12 of its potential returns per unit of risk. Selectirente is currently generating about -0.16 per unit of risk. If you would invest  2,000  in Patrimoine et Commerce on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Patrimoine et Commerce or generate 5.0% return on investment over 90 days.

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

Patrimoine et Commerce  vs.  Selectirente

Patrimoine et Commerce

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Patrimoine et Commerce are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Patrimoine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Selectirente

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selectirente has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Selectirente is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Patrimoine and Selectirente

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

The idea behind Patrimoine et Commerce and Selectirente 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.