Correlation Between Klepierre and Icade SA

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

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

Diversification Opportunities for Klepierre and Icade SA

0.73

Correlation Coefficient

Klepierre  Icade SA

Poor diversification

The 3 months correlation between Klepierre and Icade is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Klepierre SA and Icade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icade SA and Klepierre 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 Klepierre 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 Klepierre i.e., Klepierre and Icade SA go up and down completely randomly.

Pair Corralation between Klepierre and Icade SA

Assuming the 90 days horizon Klepierre is expected to generate 1.04 times less return on investment than Icade SA. But when comparing it to its historical volatility, Klepierre SA is 2.34 times less risky than Icade SA. It trades about 0.1 of its potential returns per unit of risk. Icade SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,134  in Icade SA on September 2, 2024 and sell it today you would earn a total of  92.00  from holding Icade SA or generate 4.31% return on investment over 90 days.

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

Klepierre SA  vs.  Icade SA

Klepierre SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Klepierre SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Klepierre 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Icade SA are ranked lower than 3 (%) 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 Klepierre and Icade SA

The main advantage of trading using opposite Klepierre and Icade SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klepierre 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 Klepierre 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.