Correlation Between Poulaillon and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Poulaillon and Saint Jean 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 Poulaillon and Saint Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Poulaillon SA and Saint Jean Groupe, you can compare the effects of market volatilities on Poulaillon and Saint Jean 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 Poulaillon with a short position of Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Poulaillon and Saint Jean.
Diversification Opportunities for Poulaillon and Saint Jean
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Poulaillon and Saint is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Poulaillon SA and Saint Jean Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Groupe and Poulaillon 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 Poulaillon SA are associated (or correlated) with Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Groupe has no effect on the direction of Poulaillon i.e., Poulaillon and Saint Jean go up and down completely randomly.
Pair Corralation between Poulaillon and Saint Jean
Assuming the 90 days trading horizon Poulaillon is expected to generate 3.37 times less return on investment than Saint Jean. But when comparing it to its historical volatility, Poulaillon SA is 1.89 times less risky than Saint Jean. It trades about 0.04 of its potential returns per unit of risk. Saint Jean Groupe is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Saint Jean Groupe on October 25, 2024 and sell it today you would earn a total of 60.00 from holding Saint Jean Groupe or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Poulaillon SA vs. Saint Jean Groupe
Performance |
| Timeline |
| Poulaillon SA |
| Saint Jean Groupe |
Poulaillon and Saint Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Poulaillon and Saint Jean
The main advantage of trading using opposite Poulaillon and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Poulaillon position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean's long position.| Poulaillon vs. Solocal Group SA | Poulaillon vs. Prodways Group SA | Poulaillon vs. Vicat SA | Poulaillon vs. Manitou BF SA |
| Saint Jean vs. Samse SA | Saint Jean vs. Robertet SA | Saint Jean vs. Manitou BF SA | Saint Jean vs. Ossiam Minimum Variance |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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