Correlation Between Societe De and Groupe Partouche
Can any of the company-specific risk be diversified away by investing in both Societe De and Groupe Partouche 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 Societe De and Groupe Partouche into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Societe de la and Groupe Partouche SA, you can compare the effects of market volatilities on Societe De and Groupe Partouche 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 Societe De with a short position of Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Societe De and Groupe Partouche.
Diversification Opportunities for Societe De and Groupe Partouche
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Societe and Groupe is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Societe de la and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Societe De 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 Societe de la are associated (or correlated) with Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Societe De i.e., Societe De and Groupe Partouche go up and down completely randomly.
Pair Corralation between Societe De and Groupe Partouche
Assuming the 90 days trading horizon Societe de la is expected to under-perform the Groupe Partouche. In addition to that, Societe De is 1.28 times more volatile than Groupe Partouche SA. It trades about -0.13 of its total potential returns per unit of risk. Groupe Partouche SA is currently generating about -0.04 per unit of volatility. If you would invest 5,863 in Groupe Partouche SA on September 3, 2024 and sell it today you would lose (1,863) from holding Groupe Partouche SA or give up 31.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Societe de la vs. Groupe Partouche SA
Performance |
| Timeline |
| Societe de la |
| Groupe Partouche |
Societe De and Groupe Partouche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Societe De and Groupe Partouche
The main advantage of trading using opposite Societe De and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Societe De position performs unexpectedly, Groupe Partouche 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 Groupe Partouche will offset losses from the drop in Groupe Partouche's long position.| Societe De vs. Mercialys SA | Societe De vs. Icade SA | Societe De vs. Gecina SA | Societe De vs. Altarea SCA |
| Groupe Partouche vs. Fonciere Inea | Groupe Partouche vs. Immobiliere Dassault SA | Groupe Partouche vs. Societe de la | Groupe Partouche vs. Patrimoine et Commerce |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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