Correlation Between Allegroeu and Cnova NV

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Can any of the company-specific risk be diversified away by investing in both Allegroeu and Cnova NV 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 Allegroeu and Cnova NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and Cnova NV, you can compare the effects of market volatilities on Allegroeu and Cnova NV 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 Allegroeu with a short position of Cnova NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and Cnova NV.

Diversification Opportunities for Allegroeu and Cnova NV

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Allegroeu and Cnova is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV and Allegroeu 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 Allegroeu SA are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Allegroeu i.e., Allegroeu and Cnova NV go up and down completely randomly.

Pair Corralation between Allegroeu and Cnova NV

If you would invest  295.00  in Cnova NV on September 6, 2024 and sell it today you would earn a total of  0.00  from holding Cnova NV or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.59%
ValuesDaily Returns

Allegroeu SA  vs.  Cnova NV

 Performance 
       Timeline  
Allegroeu SA 

Risk-Adjusted Performance

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Over the last 90 days Allegroeu SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Allegroeu is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Cnova NV 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Cnova NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cnova NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Allegroeu and Cnova NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allegroeu and Cnova NV

The main advantage of trading using opposite Allegroeu and Cnova NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu position performs unexpectedly, Cnova NV 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 Cnova NV will offset losses from the drop in Cnova NV's long position.
The idea behind Allegroeu SA and Cnova NV 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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