Correlation Between Argan SA and Immobiliere Dassault

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

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

Diversification Opportunities for Argan SA and Immobiliere Dassault

0.12

Correlation Coefficient

Argan SA  Immobiliere Dassault

Average diversification

The 3 months correlation between Argan and Immobiliere is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Argan SA and Immobiliere Dassault SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobiliere Dassault and Argan SA 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 Argan SA are associated (or correlated) with Immobiliere Dassault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobiliere Dassault has no effect on the direction of Argan SA i.e., Argan SA and Immobiliere Dassault go up and down completely randomly.

Pair Corralation between Argan SA and Immobiliere Dassault

Assuming the 90 days trading horizon Argan SA is expected to under-perform the Immobiliere Dassault. In addition to that, Argan SA is 1.39 times more volatile than Immobiliere Dassault SA. It trades about -0.2 of its total potential returns per unit of risk. Immobiliere Dassault SA is currently generating about -0.05 per unit of volatility. If you would invest  5,260  in Immobiliere Dassault SA on September 5, 2024 and sell it today you would lose (200.00) from holding Immobiliere Dassault SA or give up 3.8% of portfolio value over 90 days.

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

Argan SA  vs.  Immobiliere Dassault SA

Argan SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Argan 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Immobiliere Dassault

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Immobiliere Dassault SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Immobiliere Dassault is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Argan SA and Immobiliere Dassault

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

The idea behind Argan SA and Immobiliere Dassault 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.