Correlation Between Groupe CRIT and Stef SA
Can any of the company-specific risk be diversified away by investing in both Groupe CRIT and Stef SA 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 CRIT and Stef SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe CRIT SA and Stef SA, you can compare the effects of market volatilities on Groupe CRIT and Stef SA 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 CRIT with a short position of Stef SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe CRIT and Stef SA.
Diversification Opportunities for Groupe CRIT and Stef SA
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Groupe and Stef is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Groupe CRIT SA and Stef SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stef SA and Groupe CRIT 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 CRIT SA are associated (or correlated) with Stef SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stef SA has no effect on the direction of Groupe CRIT i.e., Groupe CRIT and Stef SA go up and down completely randomly.
Pair Corralation between Groupe CRIT and Stef SA
Assuming the 90 days trading horizon Groupe CRIT SA is expected to under-perform the Stef SA. In addition to that, Groupe CRIT is 1.87 times more volatile than Stef SA. It trades about -0.34 of its total potential returns per unit of risk. Stef SA is currently generating about -0.25 per unit of volatility. If you would invest 13,740 in Stef SA on September 1, 2024 and sell it today you would lose (740.00) from holding Stef SA or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Groupe CRIT SA vs. Stef SA
Performance |
| Timeline |
| Groupe CRIT SA |
| Stef SA |
Groupe CRIT and Stef SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe CRIT and Stef SA
The main advantage of trading using opposite Groupe CRIT and Stef SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe CRIT position performs unexpectedly, Stef SA 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 Stef SA will offset losses from the drop in Stef SA's long position.| Groupe CRIT vs. Synergie SE | Groupe CRIT vs. Alten SA | Groupe CRIT vs. Manitou BF SA | Groupe CRIT vs. Linedata Services 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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