Correlation Between Waga Energy and OVH Groupe

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

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

Diversification Opportunities for Waga Energy and OVH Groupe

0.58

Correlation Coefficient

Waga Energy  OVH Groupe

Very weak diversification

The 3 months correlation between Waga and OVH is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Waga Energy SA and OVH Groupe SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVH Groupe SAS and Waga Energy 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 Waga Energy SA are associated (or correlated) with OVH Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVH Groupe SAS has no effect on the direction of Waga Energy i.e., Waga Energy and OVH Groupe go up and down completely randomly.

Pair Corralation between Waga Energy and OVH Groupe

Assuming the 90 days trading horizon Waga Energy SA is expected to under-perform the OVH Groupe. In addition to that, Waga Energy is 1.32 times more volatile than OVH Groupe SAS. It trades about -0.19 of its total potential returns per unit of risk. OVH Groupe SAS is currently generating about -0.09 per unit of volatility. If you would invest  864.00  in OVH Groupe SAS on December 28, 2024 and sell it today you would lose (122.00) from holding OVH Groupe SAS or give up 14.12% of portfolio value over 90 days.

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

Waga Energy SA  vs.  OVH Groupe SAS

Waga Energy SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Waga Energy 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.

OVH Groupe SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days OVH Groupe SAS 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 technical 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.

Pair Trading with Waga Energy and OVH Groupe

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

The idea behind Waga Energy SA and OVH Groupe SAS 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.

Check out your portfolio center.

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.