Correlation Between Eurazeo and Assystem

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

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

Diversification Opportunities for Eurazeo and Assystem

-0.03

Correlation Coefficient

Eurazeo  Assystem

Good diversification

The 3 months correlation between Eurazeo and Assystem is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and Eurazeo 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 Eurazeo are associated (or correlated) with Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of Eurazeo i.e., Eurazeo and Assystem go up and down completely randomly.

Pair Corralation between Eurazeo and Assystem

Assuming the 90 days horizon Eurazeo is expected to generate 0.52 times more return on investment than Assystem. However, Eurazeo is 1.91 times less risky than Assystem. It trades about -0.01 of its potential returns per unit of risk. Assystem SA is currently generating about -0.2 per unit of risk. If you would invest  7,195  in Eurazeo on December 31, 2024 and sell it today you would lose (90.00) from holding Eurazeo or give up 1.25% of portfolio value over 90 days.

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

Eurazeo  vs.  Assystem SA

Eurazeo

Risk-Adjusted Performance

Very Weak

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

Assystem SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Eurazeo and Assystem

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

The idea behind Eurazeo and Assystem 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.