Correlation Between Agripower France and Voltalia

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

By analyzing existing cross correlation between Agripower France Sa and Voltalia SA, you can compare the effects of market volatilities on Agripower France and Voltalia 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 Agripower France with a short position of Voltalia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agripower France and Voltalia.

Diversification Opportunities for Agripower France and Voltalia

0.88

Correlation Coefficient

Agripower France  Voltalia

Very poor diversification

The 3 months correlation between Agripower and Voltalia is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Agripower France Sa and Voltalia SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltalia SA and Agripower France 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 Agripower France Sa are associated (or correlated) with Voltalia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltalia SA has no effect on the direction of Agripower France i.e., Agripower France and Voltalia go up and down completely randomly.

Pair Corralation between Agripower France and Voltalia

Assuming the 90 days trading horizon Agripower France Sa is expected to generate 1.01 times more return on investment than Voltalia. However, Agripower France is 1.01 times more volatile than Voltalia SA. It trades about -0.08 of its potential returns per unit of risk. Voltalia SA is currently generating about -0.09 per unit of risk. If you would invest  96.00  in Agripower France Sa on September 25, 2024 and sell it today you would lose (16.00) from holding Agripower France Sa or give up 16.67% of portfolio value over 90 days.

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

Agripower France Sa  vs.  Voltalia SA

Agripower France

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agripower France Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Voltalia SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voltalia SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Agripower France and Voltalia

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

The idea behind Agripower France Sa and Voltalia SA 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.