Correlation Between Mersen SA and Figeac Aero
Can any of the company-specific risk be diversified away by investing in both Mersen SA and Figeac Aero 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 Mersen SA and Figeac Aero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mersen SA and Figeac Aero SA, you can compare the effects of market volatilities on Mersen SA and Figeac Aero 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 Mersen SA with a short position of Figeac Aero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mersen SA and Figeac Aero.
Diversification Opportunities for Mersen SA and Figeac Aero
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mersen and Figeac is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mersen SA and Figeac Aero SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figeac Aero SA and Mersen 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 Mersen SA are associated (or correlated) with Figeac Aero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figeac Aero SA has no effect on the direction of Mersen SA i.e., Mersen SA and Figeac Aero go up and down completely randomly.
Pair Corralation between Mersen SA and Figeac Aero
Assuming the 90 days trading horizon Mersen SA is expected to under-perform the Figeac Aero. In addition to that, Mersen SA is 1.08 times more volatile than Figeac Aero SA. It trades about -0.05 of its total potential returns per unit of risk. Figeac Aero SA is currently generating about 0.02 per unit of volatility. If you would invest 530.00 in Figeac Aero SA on September 25, 2024 and sell it today you would earn a total of 62.00 from holding Figeac Aero SA or generate 11.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Mersen SA vs. Figeac Aero SA
Performance |
Timeline |
Mersen SA |
Figeac Aero SA |
Mersen SA and Figeac Aero Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mersen SA and Figeac Aero
The main advantage of trading using opposite Mersen SA and Figeac Aero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mersen SA position performs unexpectedly, Figeac Aero 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 Figeac Aero will offset losses from the drop in Figeac Aero's long position.The idea behind Mersen SA and Figeac Aero 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.Figeac Aero vs. Groupe Guillin SA | Figeac Aero vs. Latcore SA | Figeac Aero vs. Prodways Group SA | Figeac Aero vs. Mersen SA |
Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |