Correlation Between CIE Automotive and EDreams Odigeo

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

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

Diversification Opportunities for CIE Automotive and EDreams Odigeo

0.79

Correlation Coefficient

CIE Automotive  EDreams Odigeo

Poor diversification

The 3 months correlation between CIE and EDreams is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CIE Automotive SA and eDreams Odigeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eDreams Odigeo SA and CIE Automotive 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 CIE Automotive SA are associated (or correlated) with EDreams Odigeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eDreams Odigeo SA has no effect on the direction of CIE Automotive i.e., CIE Automotive and EDreams Odigeo go up and down completely randomly.

Pair Corralation between CIE Automotive and EDreams Odigeo

Assuming the 90 days trading horizon CIE Automotive is expected to generate 1.28 times less return on investment than EDreams Odigeo. But when comparing it to its historical volatility, CIE Automotive SA is 1.91 times less risky than EDreams Odigeo. It trades about 0.17 of its potential returns per unit of risk. eDreams Odigeo SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  724.00  in eDreams Odigeo SA on April 23, 2025 and sell it today you would earn a total of  101.00  from holding eDreams Odigeo SA or generate 13.95% return on investment over 90 days.

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

CIE Automotive SA  vs.  eDreams Odigeo SA

CIE Automotive SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIE Automotive SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, CIE Automotive may actually be approaching a critical reversion point that can send shares even higher in August 2025.

eDreams Odigeo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eDreams Odigeo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EDreams Odigeo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CIE Automotive and EDreams Odigeo

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

The idea behind CIE Automotive SA and eDreams Odigeo 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.