Correlation Between Viohalco and Celyad SA

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

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

Diversification Opportunities for Viohalco and Celyad SA

-0.58

Correlation Coefficient

Viohalco  Celyad SA

Excellent diversification

The 3 months correlation between Viohalco and Celyad is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Viohalco SA and Celyad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celyad SA and Viohalco 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 Viohalco SA are associated (or correlated) with Celyad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celyad SA has no effect on the direction of Viohalco i.e., Viohalco and Celyad SA go up and down completely randomly.

Pair Corralation between Viohalco and Celyad SA

Assuming the 90 days trading horizon Viohalco SA is expected to under-perform the Celyad SA. But the stock apears to be less risky and, when comparing its historical volatility, Viohalco SA is 11.73 times less risky than Celyad SA. The stock trades about -0.1 of its potential returns per unit of risk. The Celyad SA is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  26.00  in Celyad SA on September 22, 2024 and sell it today you would earn a total of  43.00  from holding Celyad SA or generate 165.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.78%
Values	Daily Returns

Viohalco SA  vs.  Celyad SA

Viohalco SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viohalco SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Celyad SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Celyad SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Celyad SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Viohalco and Celyad SA

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

The idea behind Viohalco SA and Celyad 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.