Correlation Between Groupe Guillin and Akwel SA
Can any of the company-specific risk be diversified away by investing in both Groupe Guillin and Akwel 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 Groupe Guillin and Akwel SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe Guillin SA and Akwel SA, you can compare the effects of market volatilities on Groupe Guillin and Akwel 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 Groupe Guillin with a short position of Akwel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Guillin and Akwel SA.
Diversification Opportunities for Groupe Guillin and Akwel SA
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Groupe and Akwel is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Akwel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akwel SA and Groupe Guillin 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 Groupe Guillin SA are associated (or correlated) with Akwel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akwel SA has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Akwel SA go up and down completely randomly.
Pair Corralation between Groupe Guillin and Akwel SA
Assuming the 90 days trading horizon Groupe Guillin SA is expected to generate 0.57 times more return on investment than Akwel SA. However, Groupe Guillin SA is 1.76 times less risky than Akwel SA. It trades about -0.15 of its potential returns per unit of risk. Akwel SA is currently generating about -0.17 per unit of risk. If you would invest 2,890 in Groupe Guillin SA on August 29, 2024 and sell it today you would lose (310.00) from holding Groupe Guillin SA or give up 10.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe Guillin SA vs. Akwel SA
Performance |
| Timeline |
| Groupe Guillin SA |
| Akwel SA |
Groupe Guillin and Akwel SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Guillin and Akwel SA
The main advantage of trading using opposite Groupe Guillin and Akwel SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Guillin position performs unexpectedly, Akwel 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 Akwel SA will offset losses from the drop in Akwel SA's long position.| Groupe Guillin vs. Neurones | Groupe Guillin vs. Aubay Socit Anonyme | Groupe Guillin vs. Infotel SA | Groupe Guillin vs. Manitou BF SA |
| Akwel SA vs. Groupe Guillin SA | Akwel SA vs. Plastiques du Val | Akwel SA vs. Jacquet Metal Service | Akwel SA vs. Derichebourg |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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