Correlation Between GEA GROUP and Carrefour
Can any of the company-specific risk be diversified away by investing in both GEA GROUP and Carrefour 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 GEA GROUP and Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEA GROUP and Carrefour SA, you can compare the effects of market volatilities on GEA GROUP and Carrefour 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 GEA GROUP with a short position of Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEA GROUP and Carrefour.
Diversification Opportunities for GEA GROUP and Carrefour
Good diversification
The 3 months correlation between GEA and Carrefour is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GEA GROUP and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA and GEA GROUP 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 GEA GROUP are associated (or correlated) with Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of GEA GROUP i.e., GEA GROUP and Carrefour go up and down completely randomly.
Pair Corralation between GEA GROUP and Carrefour
Assuming the 90 days horizon GEA GROUP is expected to generate 0.52 times more return on investment than Carrefour. However, GEA GROUP is 1.92 times less risky than Carrefour. It trades about 0.09 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.12 per unit of risk. If you would invest 4,480 in GEA GROUP on August 28, 2024 and sell it today you would earn a total of 154.00 from holding GEA GROUP or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GEA GROUP vs. Carrefour SA
Performance |
| Timeline |
| GEA GROUP |
| Carrefour SA |
GEA GROUP and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEA GROUP and Carrefour
The main advantage of trading using opposite GEA GROUP and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEA GROUP position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| GEA GROUP vs. Superior Plus Corp | GEA GROUP vs. NMI Holdings | GEA GROUP vs. Origin Agritech | GEA GROUP vs. SIVERS SEMICONDUCTORS AB |
| Carrefour vs. Superior Plus Corp | Carrefour vs. NMI Holdings | Carrefour vs. Origin Agritech | Carrefour vs. SIVERS SEMICONDUCTORS AB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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