Correlation Between Frey SA and Groupimo
Can any of the company-specific risk be diversified away by investing in both Frey SA and Groupimo 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 Frey SA and Groupimo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frey SA and Groupimo SA, you can compare the effects of market volatilities on Frey SA and Groupimo 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 Frey SA with a short position of Groupimo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frey SA and Groupimo.
Diversification Opportunities for Frey SA and Groupimo
Very weak diversification
The 3 months correlation between Frey and Groupimo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Frey SA and Groupimo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupimo SA and Frey SA 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 Frey SA are associated (or correlated) with Groupimo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupimo SA has no effect on the direction of Frey SA i.e., Frey SA and Groupimo go up and down completely randomly.
Pair Corralation between Frey SA and Groupimo
Assuming the 90 days trading horizon Frey SA is expected to under-perform the Groupimo. But the stock apears to be less risky and, when comparing its historical volatility, Frey SA is 15.98 times less risky than Groupimo. The stock trades about -0.01 of its potential returns per unit of risk. The Groupimo SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Groupimo SA on August 29, 2024 and sell it today you would earn a total of 7.00 from holding Groupimo SA or generate 35.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Frey SA vs. Groupimo SA
Performance |
| Timeline |
| Frey SA |
| Groupimo SA |
Frey SA and Groupimo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frey SA and Groupimo
The main advantage of trading using opposite Frey SA and Groupimo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frey SA position performs unexpectedly, Groupimo 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 Groupimo will offset losses from the drop in Groupimo's long position.| Frey SA vs. Fonciere Inea | Frey SA vs. Fonciere Lyonnaise | Frey SA vs. Immobiliere Dassault SA | Frey SA vs. Argan 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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