Correlation Between Vivendi SA and York Water

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

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

Diversification Opportunities for Vivendi SA and York Water

-0.44

Correlation Coefficient

Vivendi SA  York Water

Very good diversification

The 3 months correlation between Vivendi and York is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SA PK and The York Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on York Water and Vivendi 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 Vivendi SA PK are associated (or correlated) with York Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of York Water has no effect on the direction of Vivendi SA i.e., Vivendi SA and York Water go up and down completely randomly.

Pair Corralation between Vivendi SA and York Water

If you would invest  1,057  in Vivendi SA PK on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Vivendi SA PK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Vivendi SA PK  vs.  The York Water

Vivendi SA PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivendi SA PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Vivendi SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

York Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The York Water has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, York Water is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Vivendi SA and York Water

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

The idea behind Vivendi SA PK and The York Water 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.