Correlation Between Elior SCA and Derichebourg

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

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

Diversification Opportunities for Elior SCA and Derichebourg

0.59

Correlation Coefficient

Elior SCA  Derichebourg

Very weak diversification

The 3 months correlation between Elior and Derichebourg is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elior SCA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Elior SCA 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 Elior SCA 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 Elior SCA i.e., Elior SCA and Derichebourg go up and down completely randomly.

Pair Corralation between Elior SCA and Derichebourg

Assuming the 90 days trading horizon Elior SCA is expected to generate 1.21 times more return on investment than Derichebourg. However, Elior SCA is 1.21 times more volatile than Derichebourg. It trades about 0.06 of its potential returns per unit of risk. Derichebourg is currently generating about 0.01 per unit of risk. If you would invest  248.00  in Elior SCA on April 25, 2025 and sell it today you would earn a total of  18.00  from holding Elior SCA or generate 7.26% return on investment over 90 days.

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

Elior SCA  vs.  Derichebourg

Elior SCA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elior SCA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Elior SCA may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Derichebourg

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Derichebourg are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Derichebourg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Elior SCA and Derichebourg

The main advantage of trading using opposite Elior SCA and Derichebourg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elior SCA 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 Elior SCA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.