Correlation Between Groupe Guillin and Groupe LDLC
Can any of the company-specific risk be diversified away by investing in both Groupe Guillin and Groupe LDLC 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 Groupe LDLC 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 Groupe LDLC SA, you can compare the effects of market volatilities on Groupe Guillin and Groupe LDLC 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 Groupe LDLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Guillin and Groupe LDLC.
Diversification Opportunities for Groupe Guillin and Groupe LDLC
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groupe and Groupe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Groupe LDLC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe LDLC 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 Groupe LDLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe LDLC SA has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Groupe LDLC go up and down completely randomly.
Pair Corralation between Groupe Guillin and Groupe LDLC
Assuming the 90 days trading horizon Groupe Guillin SA is expected to generate 0.68 times more return on investment than Groupe LDLC. However, Groupe Guillin SA is 1.46 times less risky than Groupe LDLC. It trades about 0.05 of its potential returns per unit of risk. Groupe LDLC SA is currently generating about -0.04 per unit of risk. If you would invest 1,815 in Groupe Guillin SA on August 30, 2024 and sell it today you would earn a total of 765.00 from holding Groupe Guillin SA or generate 42.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe Guillin SA vs. Groupe LDLC SA
Performance |
| Timeline |
| Groupe Guillin SA |
| Groupe LDLC SA |
Groupe Guillin and Groupe LDLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Guillin and Groupe LDLC
The main advantage of trading using opposite Groupe Guillin and Groupe LDLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Guillin position performs unexpectedly, Groupe LDLC 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 Groupe LDLC will offset losses from the drop in Groupe LDLC's long position.| Groupe Guillin vs. Neurones | Groupe Guillin vs. Aubay Socit Anonyme | Groupe Guillin vs. Infotel SA | Groupe Guillin vs. Manitou BF SA |
| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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