Correlation Between Compagnie and Accentis

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

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

Diversification Opportunities for Compagnie and Accentis

-0.26

Correlation Coefficient

Compagnie  Accentis

Very good diversification

The 3 months correlation between Compagnie and Accentis is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie d Entreprises and Accentis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accentis and Compagnie 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 Compagnie d Entreprises are associated (or correlated) with Accentis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accentis has no effect on the direction of Compagnie i.e., Compagnie and Accentis go up and down completely randomly.

Pair Corralation between Compagnie and Accentis

Assuming the 90 days trading horizon Compagnie d Entreprises is expected to generate 0.32 times more return on investment than Accentis. However, Compagnie d Entreprises is 3.1 times less risky than Accentis. It trades about 0.35 of its potential returns per unit of risk. Accentis is currently generating about -0.1 per unit of risk. If you would invest  720.00  in Compagnie d Entreprises on February 8, 2024 and sell it today you would earn a total of  50.00  from holding Compagnie d Entreprises or generate 6.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Compagnie d Entreprises  vs.  Accentis

Compagnie d Entreprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie d Entreprises has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Compagnie is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Accentis

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Accentis are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Accentis is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Compagnie and Accentis

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

The idea behind Compagnie d Entreprises and Accentis 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.