Correlation Between ABIVAX Société and Constellium

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

By analyzing existing cross correlation between ABIVAX Socit Anonyme and Constellium Nv, you can compare the effects of market volatilities on ABIVAX Société and Constellium 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 ABIVAX Société with a short position of Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABIVAX Société and Constellium.

Diversification Opportunities for ABIVAX Société and Constellium

-0.58

Correlation Coefficient

ABIVAX Société  Constellium

Excellent diversification

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

Pair Corralation between ABIVAX Société and Constellium

If you would invest  1,515  in ABIVAX Socit Anonyme on March 28, 2024 and sell it today you would earn a total of  0.00  from holding ABIVAX Socit Anonyme or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ABIVAX Socit Anonyme  vs.  Constellium Nv

ABIVAX Socit Anonyme

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ABIVAX Socit Anonyme are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ABIVAX Société reported solid returns over the last few months and may actually be approaching a breakup point.

Constellium Nv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Constellium Nv has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with ABIVAX Société and Constellium

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

The idea behind ABIVAX Socit Anonyme and Constellium Nv 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.