Correlation Between SPIE SA and Derichebourg

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

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

Diversification Opportunities for SPIE SA and Derichebourg

0.79

Correlation Coefficient

SPIE SA  Derichebourg

Poor diversification

The 3 months correlation between SPIE and Derichebourg is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding SPIE SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and SPIE SA 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 SPIE SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of SPIE SA i.e., SPIE SA and Derichebourg go up and down completely randomly.

Pair Corralation between SPIE SA and Derichebourg

Assuming the 90 days trading horizon SPIE SA is expected to generate 0.61 times more return on investment than Derichebourg. However, SPIE SA is 1.63 times less risky than Derichebourg. It trades about 0.04 of its potential returns per unit of risk. Derichebourg is currently generating about 0.01 per unit of risk. If you would invest  2,350  in SPIE SA on September 17, 2024 and sell it today you would earn a total of  670.00  from holding SPIE SA or generate 28.51% return on investment over 90 days.

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

SPIE SA  vs.  Derichebourg

SPIE SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Derichebourg

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SPIE SA and Derichebourg

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

The idea behind SPIE SA and Derichebourg 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.