Correlation Between Passat Socit and Figeac Aero

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

By analyzing existing cross correlation between Passat Socit Anonyme and Figeac Aero SA, you can compare the effects of market volatilities on Passat Socit and Figeac Aero 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 Passat Socit with a short position of Figeac Aero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Passat Socit and Figeac Aero.

Diversification Opportunities for Passat Socit and Figeac Aero

-0.17

Correlation Coefficient

Passat Socit  Figeac Aero

Good diversification

The 3 months correlation between Passat and Figeac is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Passat Socit Anonyme and Figeac Aero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figeac Aero SA and Passat Socit 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 Passat Socit Anonyme are associated (or correlated) with Figeac Aero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figeac Aero SA has no effect on the direction of Passat Socit i.e., Passat Socit and Figeac Aero go up and down completely randomly.

Pair Corralation between Passat Socit and Figeac Aero

Assuming the 90 days trading horizon Passat Socit is expected to generate 3.42 times less return on investment than Figeac Aero. But when comparing it to its historical volatility, Passat Socit Anonyme is 1.15 times less risky than Figeac Aero. It trades about 0.05 of its potential returns per unit of risk. Figeac Aero SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  566.00  in Figeac Aero SA on October 5, 2024 and sell it today you would earn a total of  30.00  from holding Figeac Aero SA or generate 5.3% return on investment over 90 days.

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

Passat Socit Anonyme  vs.  Figeac Aero SA

Passat Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

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

Figeac Aero SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Figeac Aero SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Figeac Aero may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Passat Socit and Figeac Aero

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

The idea behind Passat Socit Anonyme and Figeac Aero 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.