Correlation Between Adocia and Gaumont SA
Can any of the company-specific risk be diversified away by investing in both Adocia and Gaumont 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 Adocia and Gaumont SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adocia and Gaumont SA, you can compare the effects of market volatilities on Adocia and Gaumont 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 Adocia with a short position of Gaumont SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adocia and Gaumont SA.
Diversification Opportunities for Adocia and Gaumont SA
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adocia and Gaumont is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Adocia and Gaumont SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaumont SA and Adocia 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 Adocia are associated (or correlated) with Gaumont SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaumont SA has no effect on the direction of Adocia i.e., Adocia and Gaumont SA go up and down completely randomly.
Pair Corralation between Adocia and Gaumont SA
Assuming the 90 days trading horizon Adocia is expected to under-perform the Gaumont SA. In addition to that, Adocia is 2.25 times more volatile than Gaumont SA. It trades about -0.32 of its total potential returns per unit of risk. Gaumont SA is currently generating about 0.18 per unit of volatility. If you would invest 8,300 in Gaumont SA on November 27, 2024 and sell it today you would earn a total of 450.00 from holding Gaumont SA or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adocia vs. Gaumont SA
Performance |
| Timeline |
| Adocia |
| Gaumont SA |
Adocia and Gaumont SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adocia and Gaumont SA
The main advantage of trading using opposite Adocia and Gaumont SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adocia position performs unexpectedly, Gaumont 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 Gaumont SA will offset losses from the drop in Gaumont SA's long position.The idea behind Adocia and Gaumont 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.| Gaumont SA vs. NRJ Group | Gaumont SA vs. Groupe Partouche SA | Gaumont SA vs. Passat Socit Anonyme | Gaumont SA vs. Jacques Bogart SA |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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