Correlation Between Groupe Guillin and Verallia
Can any of the company-specific risk be diversified away by investing in both Groupe Guillin and Verallia 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 Verallia 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 Verallia, you can compare the effects of market volatilities on Groupe Guillin and Verallia 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 Verallia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Guillin and Verallia.
Diversification Opportunities for Groupe Guillin and Verallia
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Groupe and Verallia is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Verallia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verallia 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 Verallia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verallia has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Verallia go up and down completely randomly.
Pair Corralation between Groupe Guillin and Verallia
Assuming the 90 days trading horizon Groupe Guillin SA is expected to generate 0.8 times more return on investment than Verallia. However, Groupe Guillin SA is 1.25 times less risky than Verallia. It trades about 0.15 of its potential returns per unit of risk. Verallia is currently generating about -0.28 per unit of risk. If you would invest 2,605 in Groupe Guillin SA on September 21, 2024 and sell it today you would earn a total of 115.00 from holding Groupe Guillin SA or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe Guillin SA vs. Verallia
Performance |
| Timeline |
| Groupe Guillin SA |
| Verallia |
Groupe Guillin and Verallia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Guillin and Verallia
The main advantage of trading using opposite Groupe Guillin and Verallia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Guillin position performs unexpectedly, Verallia 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 Verallia will offset losses from the drop in Verallia's long position.| Groupe Guillin vs. Robertet SA | Groupe Guillin vs. Thermador Groupe SA | Groupe Guillin vs. Grard Perrier Industrie |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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