Correlation Between Grolleau SAS and Granite 3x
Can any of the company-specific risk be diversified away by investing in both Grolleau SAS and Granite 3x 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 Grolleau SAS and Granite 3x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grolleau SAS and Granite 3x LVMH, you can compare the effects of market volatilities on Grolleau SAS and Granite 3x 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 Grolleau SAS with a short position of Granite 3x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grolleau SAS and Granite 3x.
Diversification Opportunities for Grolleau SAS and Granite 3x
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grolleau and Granite is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Grolleau SAS and Granite 3x LVMH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite 3x LVMH and Grolleau SAS 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 Grolleau SAS are associated (or correlated) with Granite 3x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite 3x LVMH has no effect on the direction of Grolleau SAS i.e., Grolleau SAS and Granite 3x go up and down completely randomly.
Pair Corralation between Grolleau SAS and Granite 3x
Assuming the 90 days trading horizon Grolleau SAS is expected to generate 0.52 times more return on investment than Granite 3x. However, Grolleau SAS is 1.91 times less risky than Granite 3x. It trades about 0.0 of its potential returns per unit of risk. Granite 3x LVMH is currently generating about -0.05 per unit of risk. If you would invest 486.00 in Grolleau SAS on September 2, 2024 and sell it today you would lose (68.00) from holding Grolleau SAS or give up 13.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 75.79% |
| Values | Daily Returns |
Grolleau SAS vs. Granite 3x LVMH
Performance |
| Timeline |
| Grolleau SAS |
| Granite 3x LVMH |
Grolleau SAS and Granite 3x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grolleau SAS and Granite 3x
The main advantage of trading using opposite Grolleau SAS and Granite 3x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grolleau SAS position performs unexpectedly, Granite 3x 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 Granite 3x will offset losses from the drop in Granite 3x's long position.| Grolleau SAS vs. LVMH Mot Hennessy | Grolleau SAS vs. LOreal SA | Grolleau SAS vs. Hermes International SCA | Grolleau SAS vs. Manitou BF 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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