Correlation Between Thales SA and Thales SA

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

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

Diversification Opportunities for Thales SA and Thales SA

0.74

Correlation Coefficient

Thales SA  Thales SA

Poor diversification

The 3 months correlation between Thales and Thales is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Thales SA ADR and Thales SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales SA and Thales 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 Thales SA ADR are associated (or correlated) with Thales SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales SA has no effect on the direction of Thales SA i.e., Thales SA and Thales SA go up and down completely randomly.

Pair Corralation between Thales SA and Thales SA

Assuming the 90 days horizon Thales SA ADR is expected to under-perform the Thales SA. In addition to that, Thales SA is 1.14 times more volatile than Thales SA. It trades about -0.08 of its total potential returns per unit of risk. Thales SA is currently generating about -0.07 per unit of volatility. If you would invest  16,574  in Thales SA on September 5, 2024 and sell it today you would lose (1,179) from holding Thales SA or give up 7.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Thales SA ADR  vs.  Thales SA

Thales SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thales SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Thales SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thales SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Thales SA and Thales SA

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

The idea behind Thales SA ADR and Thales 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.