Correlation Between Xaar Plc and Veolia Environnement

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xaar Plc and Veolia Environnement 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 Xaar Plc and Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xaar plc and Veolia Environnement VE, you can compare the effects of market volatilities on Xaar Plc and Veolia Environnement 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 Xaar Plc with a short position of Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xaar Plc and Veolia Environnement.

Diversification Opportunities for Xaar Plc and Veolia Environnement

XaarVeoliaDiversified AwayXaarVeoliaDiversified Away100%
0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Xaar and Veolia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Xaar plc and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement and Xaar Plc 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 Xaar plc are associated (or correlated) with Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Xaar Plc i.e., Xaar Plc and Veolia Environnement go up and down completely randomly.

Pair Corralation between Xaar Plc and Veolia Environnement

Assuming the 90 days trading horizon Xaar plc is expected to generate 4.52 times more return on investment than Veolia Environnement. However, Xaar Plc is 4.52 times more volatile than Veolia Environnement VE. It trades about 0.0 of its potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.05 per unit of risk. If you would invest  8,140  in Xaar plc on November 18, 2024 and sell it today you would lose (440.00) from holding Xaar plc or give up 5.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Xaar plc  vs.  Veolia Environnement VE

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50
JavaScript chart by amCharts 3.21.15XAR 0NY8
       Timeline  
Xaar plc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Xaar plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Xaar Plc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb65707580
Veolia Environnement 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Veolia Environnement VE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Veolia Environnement is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb26.52727.52828.5

Xaar Plc and Veolia Environnement Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.05-5.28-3.51-1.74-0.02951.653.385.116.848.58 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15XAR 0NY8
       Returns  

Pair Trading with Xaar Plc and Veolia Environnement

The main advantage of trading using opposite Xaar Plc and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xaar Plc position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.
The idea behind Xaar plc and Veolia Environnement VE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Bonds Directory
Find actively traded corporate debentures issued by US companies
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments