Correlation Between Groupe Guillin and X Fab
Can any of the company-specific risk be diversified away by investing in both Groupe Guillin and X Fab 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 X Fab 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 X Fab Silicon, you can compare the effects of market volatilities on Groupe Guillin and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Guillin and X Fab.
Diversification Opportunities for Groupe Guillin and X Fab
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groupe and XFAB is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and X Fab go up and down completely randomly.
Pair Corralation between Groupe Guillin and X Fab
Assuming the 90 days trading horizon Groupe Guillin is expected to generate 6.82 times less return on investment than X Fab. But when comparing it to its historical volatility, Groupe Guillin SA is 2.17 times less risky than X Fab. It trades about 0.07 of its potential returns per unit of risk. X Fab Silicon is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 440.00 in X Fab Silicon on September 13, 2024 and sell it today you would earn a total of 60.00 from holding X Fab Silicon or generate 13.64% 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. X Fab Silicon
Performance |
| Timeline |
| Groupe Guillin SA |
| X Fab Silicon |
Groupe Guillin and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Guillin and X Fab
The main advantage of trading using opposite Groupe Guillin and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Guillin position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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