Correlation Between Fountaine Pajo and Chargeurs
Can any of the company-specific risk be diversified away by investing in both Fountaine Pajo and Chargeurs 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 Fountaine Pajo and Chargeurs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fountaine Pajo and Chargeurs SA, you can compare the effects of market volatilities on Fountaine Pajo and Chargeurs 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 Fountaine Pajo with a short position of Chargeurs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fountaine Pajo and Chargeurs.
Diversification Opportunities for Fountaine Pajo and Chargeurs
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fountaine and Chargeurs is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Fountaine Pajo and Chargeurs SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chargeurs SA and Fountaine Pajo 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 Fountaine Pajo are associated (or correlated) with Chargeurs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chargeurs SA has no effect on the direction of Fountaine Pajo i.e., Fountaine Pajo and Chargeurs go up and down completely randomly.
Pair Corralation between Fountaine Pajo and Chargeurs
Assuming the 90 days trading horizon Fountaine Pajo is expected to under-perform the Chargeurs. But the stock apears to be less risky and, when comparing its historical volatility, Fountaine Pajo is 2.17 times less risky than Chargeurs. The stock trades about -0.41 of its potential returns per unit of risk. The Chargeurs SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 925.00 in Chargeurs SA on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Chargeurs SA or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fountaine Pajo vs. Chargeurs SA
Performance |
| Timeline |
| Fountaine Pajo |
| Chargeurs SA |
Fountaine Pajo and Chargeurs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fountaine Pajo and Chargeurs
The main advantage of trading using opposite Fountaine Pajo and Chargeurs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fountaine Pajo position performs unexpectedly, Chargeurs 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 Chargeurs will offset losses from the drop in Chargeurs' long position.| Fountaine Pajo vs. Vente Unique | Fountaine Pajo vs. Groupe Sfpi | Fountaine Pajo vs. Cegedim SA | Fountaine Pajo vs. SA Catana Group |
| Chargeurs vs. Derichebourg | Chargeurs vs. Trigano SA | Chargeurs vs. Rubis SCA | Chargeurs vs. BigBen Interactive |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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