Correlation Between Vivendi SE and Superior Plus

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

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

Diversification Opportunities for Vivendi SE and Superior Plus

-0.16

Correlation Coefficient

Vivendi SE  Superior Plus

Good diversification

The 3 months correlation between Vivendi and Superior is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SE and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp and Vivendi SE 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 SE are associated (or correlated) with Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Vivendi SE i.e., Vivendi SE and Superior Plus go up and down completely randomly.

Pair Corralation between Vivendi SE and Superior Plus

Assuming the 90 days trading horizon Vivendi SE is expected to generate 1.24 times more return on investment than Superior Plus. However, Vivendi SE is 1.24 times more volatile than Superior Plus Corp. It trades about 0.08 of its potential returns per unit of risk. Superior Plus Corp is currently generating about 0.02 per unit of risk. If you would invest  252.00  in Vivendi SE on December 25, 2024 and sell it today you would earn a total of  28.00  from holding Vivendi SE or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Vivendi SE  vs.  Superior Plus Corp

Vivendi SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vivendi SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Vivendi SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Superior Plus Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Superior Plus Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Superior Plus is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Vivendi SE and Superior Plus

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

The idea behind Vivendi SE and Superior Plus Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.