Correlation Between Icade SA and Gecina SA

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

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

Diversification Opportunities for Icade SA and Gecina SA

0.89

Correlation Coefficient

Icade SA  Gecina SA

Very poor diversification

The 3 months correlation between Icade and Gecina is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Icade SA and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Icade 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 Icade SA are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Icade SA i.e., Icade SA and Gecina SA go up and down completely randomly.

Pair Corralation between Icade SA and Gecina SA

Assuming the 90 days trading horizon Icade SA is expected to generate 1.24 times more return on investment than Gecina SA. However, Icade SA is 1.24 times more volatile than Gecina SA. It trades about -0.05 of its potential returns per unit of risk. Gecina SA is currently generating about -0.09 per unit of risk. If you would invest  2,442  in Icade SA on March 31, 2024 and sell it today you would lose (148.00) from holding Icade SA or give up 6.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Icade SA  vs.  Gecina SA

Icade SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Icade SA and Gecina SA

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

The idea behind Icade SA and Gecina 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.