Correlation Between Vivendi SA and Malteries Franco

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

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

Diversification Opportunities for Vivendi SA and Malteries Franco

-0.47

Correlation Coefficient

Vivendi SA  Malteries Franco

Very good diversification

The 3 months correlation between Vivendi and Malteries is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA and Malteries Franco Belges Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malteries Franco Belges and Vivendi 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 Vivendi SA are associated (or correlated) with Malteries Franco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malteries Franco Belges has no effect on the direction of Vivendi SA i.e., Vivendi SA and Malteries Franco go up and down completely randomly.

Pair Corralation between Vivendi SA and Malteries Franco

Assuming the 90 days trading horizon Vivendi SA is expected to under-perform the Malteries Franco. In addition to that, Vivendi SA is 2.38 times more volatile than Malteries Franco Belges Socit. It trades about -0.01 of its total potential returns per unit of risk. Malteries Franco Belges Socit is currently generating about 0.05 per unit of volatility. If you would invest  62,806  in Malteries Franco Belges Socit on December 4, 2024 and sell it today you would earn a total of  21,694  from holding Malteries Franco Belges Socit or generate 34.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	81.87%
Values	Daily Returns

Vivendi SA  vs.  Malteries Franco Belges Socit

Vivendi SA

Risk-Adjusted Performance

Very Weak

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

Malteries Franco Belges

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Malteries Franco Belges Socit are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malteries Franco sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vivendi SA and Malteries Franco

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

The idea behind Vivendi SA and Malteries Franco Belges Socit 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.