Correlation Between Eurazeo and SPIE SA
Can any of the company-specific risk be diversified away by investing in both Eurazeo and SPIE SA 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 SPIE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eurazeo and SPIE SA, you can compare the effects of market volatilities on Eurazeo and SPIE SA 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 SPIE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eurazeo and SPIE SA.
Diversification Opportunities for Eurazeo and SPIE SA
Very good diversification
The 3 months correlation between Eurazeo and SPIE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and SPIE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPIE 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 SPIE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPIE SA has no effect on the direction of Eurazeo i.e., Eurazeo and SPIE SA go up and down completely randomly.
Pair Corralation between Eurazeo and SPIE SA
Assuming the 90 days horizon Eurazeo is expected to generate 32.51 times less return on investment than SPIE SA. But when comparing it to its historical volatility, Eurazeo is 1.57 times less risky than SPIE SA. It trades about 0.01 of its potential returns per unit of risk. SPIE SA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,958 in SPIE SA on December 29, 2024 and sell it today you would earn a total of 1,012 from holding SPIE SA or generate 34.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
Eurazeo vs. SPIE SA
Performance |
Timeline |
Eurazeo |
SPIE SA |
Eurazeo and SPIE SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eurazeo and SPIE SA
The main advantage of trading using opposite Eurazeo and SPIE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eurazeo position performs unexpectedly, SPIE SA 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 SPIE SA will offset losses from the drop in SPIE SA's long position.Eurazeo vs. Wendel | Eurazeo vs. Groep Brussel Lambert | Eurazeo vs. Ackermans Van Haaren | Eurazeo vs. SEB SA |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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