Correlation Between Hermes International and Poxel SA
Can any of the company-specific risk be diversified away by investing in both Hermes International and Poxel 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 Hermes International and Poxel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hermes International SCA and Poxel SA, you can compare the effects of market volatilities on Hermes International and Poxel 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 Hermes International with a short position of Poxel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hermes International and Poxel SA.
Diversification Opportunities for Hermes International and Poxel SA
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hermes and Poxel is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hermes International SCA and Poxel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poxel SA and Hermes International 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 Hermes International SCA are associated (or correlated) with Poxel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poxel SA has no effect on the direction of Hermes International i.e., Hermes International and Poxel SA go up and down completely randomly.
Pair Corralation between Hermes International and Poxel SA
Assuming the 90 days trading horizon Hermes International SCA is expected to generate 0.11 times more return on investment than Poxel SA. However, Hermes International SCA is 8.79 times less risky than Poxel SA. It trades about 0.27 of its potential returns per unit of risk. Poxel SA is currently generating about 0.03 per unit of risk. If you would invest 219,729 in Hermes International SCA on December 4, 2024 and sell it today you would earn a total of 53,771 from holding Hermes International SCA or generate 24.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hermes International SCA vs. Poxel SA
Performance |
Timeline |
Hermes International SCA |
Poxel SA |
Hermes International and Poxel SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hermes International and Poxel SA
The main advantage of trading using opposite Hermes International and Poxel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hermes International position performs unexpectedly, Poxel 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 Poxel SA will offset losses from the drop in Poxel SA's long position.Hermes International vs. Kering SA | Hermes International vs. LVMH Mot Hennessy | Hermes International vs. LOreal SA | Hermes International vs. Christian Dior SE |
Poxel SA vs. Metalliance SA | Poxel SA vs. CMG Cleantech SA | Poxel SA vs. Jacquet Metal Service | Poxel SA vs. Gaztransport Technigaz SAS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |