Correlation Between Immobiliere Dassault and Icade SA

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

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

Diversification Opportunities for Immobiliere Dassault and Icade SA

-0.2

Correlation Coefficient

Immobiliere Dassault  Icade SA

Good diversification

The 3 months correlation between Immobiliere and Icade is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Immobiliere Dassault SA and Icade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icade SA and Immobiliere Dassault 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 Immobiliere Dassault SA are associated (or correlated) with Icade SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icade SA has no effect on the direction of Immobiliere Dassault i.e., Immobiliere Dassault and Icade SA go up and down completely randomly.

Pair Corralation between Immobiliere Dassault and Icade SA

Assuming the 90 days trading horizon Immobiliere Dassault SA is expected to under-perform the Icade SA. But the stock apears to be less risky and, when comparing its historical volatility, Immobiliere Dassault SA is 1.83 times less risky than Icade SA. The stock trades about -0.05 of its potential returns per unit of risk. The Icade SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,188  in Icade SA on September 5, 2024 and sell it today you would earn a total of  58.00  from holding Icade SA or generate 2.65% return on investment over 90 days.

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

Immobiliere Dassault SA  vs.  Icade SA

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.

Icade SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Icade SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Icade SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Immobiliere Dassault and Icade SA

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

The idea behind Immobiliere Dassault SA and Icade 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.