Correlation Between Cnova NV and Allegroeu

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

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

Diversification Opportunities for Cnova NV and Allegroeu

0.0

Correlation Coefficient

Cnova NV  Allegroeu

Pay attention - limited upside

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

Pair Corralation between Cnova NV and Allegroeu

If you would invest  406.00  in Allegroeu SA on September 11, 2024 and sell it today you would earn a total of  344.00  from holding Allegroeu SA or generate 84.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.68%
Values	Daily Returns

Cnova NV  vs.  Allegroeu SA

Cnova NV

Risk-Adjusted Performance

0 of 100

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 SA

Risk-Adjusted Performance

0 of 100

Very Weak

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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cnova NV and Allegroeu

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

The idea behind Cnova NV and Allegroeu 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.