Correlation Between Rallye SA and Fonciere Lyonnaise
Can any of the company-specific risk be diversified away by investing in both Rallye SA and Fonciere Lyonnaise 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 Rallye SA and Fonciere Lyonnaise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rallye SA and Fonciere Lyonnaise, you can compare the effects of market volatilities on Rallye SA and Fonciere Lyonnaise 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 Rallye SA with a short position of Fonciere Lyonnaise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rallye SA and Fonciere Lyonnaise.
Diversification Opportunities for Rallye SA and Fonciere Lyonnaise
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rallye and Fonciere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rallye SA and Fonciere Lyonnaise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonciere Lyonnaise and Rallye 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 Rallye SA are associated (or correlated) with Fonciere Lyonnaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonciere Lyonnaise has no effect on the direction of Rallye SA i.e., Rallye SA and Fonciere Lyonnaise go up and down completely randomly.
Pair Corralation between Rallye SA and Fonciere Lyonnaise
If you would invest 6,680 in Fonciere Lyonnaise on September 9, 2024 and sell it today you would earn a total of 600.00 from holding Fonciere Lyonnaise or generate 8.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rallye SA vs. Fonciere Lyonnaise
Performance |
Timeline |
Rallye SA |
Fonciere Lyonnaise |
Rallye SA and Fonciere Lyonnaise Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rallye SA and Fonciere Lyonnaise
The main advantage of trading using opposite Rallye SA and Fonciere Lyonnaise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rallye SA position performs unexpectedly, Fonciere Lyonnaise 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 Fonciere Lyonnaise will offset losses from the drop in Fonciere Lyonnaise's long position.The idea behind Rallye SA and Fonciere Lyonnaise 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.Fonciere Lyonnaise vs. Gecina SA | Fonciere Lyonnaise vs. Icade SA | Fonciere Lyonnaise vs. Altarea SCA | Fonciere Lyonnaise vs. Mercialys 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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