Correlation Between Rubis SCA and Assystem

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

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

Diversification Opportunities for Rubis SCA and Assystem

0.64

Correlation Coefficient

Rubis SCA  Assystem

Poor diversification

The 3 months correlation between Rubis and Assystem is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and Rubis SCA 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 Rubis SCA 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 Rubis SCA i.e., Rubis SCA and Assystem go up and down completely randomly.

Pair Corralation between Rubis SCA and Assystem

Assuming the 90 days trading horizon Rubis SCA is expected to under-perform the Assystem. But the stock apears to be less risky and, when comparing its historical volatility, Rubis SCA is 2.0 times less risky than Assystem. The stock trades about -0.01 of its potential returns per unit of risk. The Assystem SA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  3,525  in Assystem SA on September 24, 2024 and sell it today you would earn a total of  510.00  from holding Assystem SA or generate 14.47% return on investment over 90 days.

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

Rubis SCA  vs.  Assystem SA

Rubis SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubis SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Rubis SCA 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

0 of 100

Very Weak

Over the last 90 days Assystem SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Rubis SCA and Assystem

The main advantage of trading using opposite Rubis SCA and Assystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubis SCA 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 Rubis SCA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.