Correlation Between Groupe LDLC and Gaussin
Can any of the company-specific risk be diversified away by investing in both Groupe LDLC and Gaussin 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 LDLC and Gaussin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe LDLC SA and Gaussin, you can compare the effects of market volatilities on Groupe LDLC and Gaussin 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 LDLC with a short position of Gaussin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe LDLC and Gaussin.
Diversification Opportunities for Groupe LDLC and Gaussin
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Groupe and Gaussin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Groupe LDLC SA and Gaussin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaussin and Groupe LDLC 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 LDLC SA are associated (or correlated) with Gaussin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaussin has no effect on the direction of Groupe LDLC i.e., Groupe LDLC and Gaussin go up and down completely randomly.
Pair Corralation between Groupe LDLC and Gaussin
Assuming the 90 days trading horizon Groupe LDLC SA is expected to under-perform the Gaussin. But the stock apears to be less risky and, when comparing its historical volatility, Groupe LDLC SA is 7.67 times less risky than Gaussin. The stock trades about -0.37 of its potential returns per unit of risk. The Gaussin is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Gaussin on September 1, 2024 and sell it today you would lose (1.00) from holding Gaussin or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Groupe LDLC SA vs. Gaussin
Performance |
| Timeline |
| Groupe LDLC SA |
| Gaussin |
Groupe LDLC and Gaussin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe LDLC and Gaussin
The main advantage of trading using opposite Groupe LDLC and Gaussin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe LDLC position performs unexpectedly, Gaussin 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 Gaussin will offset losses from the drop in Gaussin's long position.| Groupe LDLC vs. Piscines Desjoyaux SA | Groupe LDLC vs. Claranova SE | Groupe LDLC vs. Trigano SA | Groupe LDLC vs. Chargeurs SA |
| Gaussin vs. Europlasma SA | Gaussin vs. Novacyt | Gaussin vs. Drone Volt SA | Gaussin vs. Blockchain Group 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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