Correlation Between Foncire Euris and Derichebourg

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

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

Diversification Opportunities for Foncire Euris and Derichebourg

-0.42

Correlation Coefficient

Foncire Euris  Derichebourg

Very good diversification

The 3 months correlation between Foncire and Derichebourg is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Foncire Euris SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Foncire Euris 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 Foncire Euris SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Foncire Euris i.e., Foncire Euris and Derichebourg go up and down completely randomly.

Pair Corralation between Foncire Euris and Derichebourg

If you would invest  16.00  in Foncire Euris SA on January 31, 2024 and sell it today you would earn a total of  0.00  from holding Foncire Euris SA 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

Foncire Euris SA  vs.  Derichebourg

Foncire Euris SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Foncire Euris SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Foncire Euris may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Derichebourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Derichebourg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and 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 Foncire Euris and Derichebourg

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

The idea behind Foncire Euris SA and Derichebourg 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.