Correlation Between Renault SA and Code Green

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

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

Diversification Opportunities for Renault SA and Code Green

-0.61

Correlation Coefficient

Renault SA  Code Green

Excellent diversification

The 3 months correlation between Renault and Code is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Renault SA and Code Green Apparel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Code Green Apparel and Renault 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 Renault SA are associated (or correlated) with Code Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Code Green Apparel has no effect on the direction of Renault SA i.e., Renault SA and Code Green go up and down completely randomly.

Pair Corralation between Renault SA and Code Green

Assuming the 90 days horizon Renault SA is expected to generate 617.37 times less return on investment than Code Green. But when comparing it to its historical volatility, Renault SA is 118.34 times less risky than Code Green. It trades about 0.04 of its potential returns per unit of risk. Code Green Apparel is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Code Green Apparel on August 21, 2025 and sell it today you would lose (0.01) from holding Code Green Apparel or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Renault SA  vs.  Code Green Apparel

Renault SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Renault SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Renault SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Code Green Apparel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Code Green Apparel are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Code Green exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Renault SA and Code Green

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

The idea behind Renault SA and Code Green Apparel 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.