Correlation Between Tikehau Capital and IDI SCA

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

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

Diversification Opportunities for Tikehau Capital and IDI SCA

0.09

Correlation Coefficient

Tikehau Capital  IDI SCA

Significant diversification

The 3 months correlation between Tikehau and IDI is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tikehau Capital and IDI SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI SCA and Tikehau Capital 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 Tikehau Capital are associated (or correlated) with IDI SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI SCA has no effect on the direction of Tikehau Capital i.e., Tikehau Capital and IDI SCA go up and down completely randomly.

Pair Corralation between Tikehau Capital and IDI SCA

Assuming the 90 days trading horizon Tikehau Capital is expected to under-perform the IDI SCA. In addition to that, Tikehau Capital is 1.55 times more volatile than IDI SCA. It trades about -0.03 of its total potential returns per unit of risk. IDI SCA is currently generating about 0.17 per unit of volatility. If you would invest  6,780  in IDI SCA on December 30, 2024 and sell it today you would earn a total of  620.00  from holding IDI SCA or generate 9.14% return on investment over 90 days.

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

Tikehau Capital  vs.  IDI SCA

Tikehau Capital

Risk-Adjusted Performance

Very Weak

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

IDI SCA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IDI SCA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IDI SCA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tikehau Capital and IDI SCA

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

The idea behind Tikehau Capital and IDI SCA 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.