Correlation Between Gaumont SA and Plastiques
Can any of the company-specific risk be diversified away by investing in both Gaumont SA and Plastiques 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 Gaumont SA and Plastiques into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaumont SA and Plastiques du Val, you can compare the effects of market volatilities on Gaumont SA and Plastiques 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 Gaumont SA with a short position of Plastiques. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaumont SA and Plastiques.
Diversification Opportunities for Gaumont SA and Plastiques
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaumont and Plastiques is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gaumont SA and Plastiques du Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastiques du Val and Gaumont 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 Gaumont SA are associated (or correlated) with Plastiques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastiques du Val has no effect on the direction of Gaumont SA i.e., Gaumont SA and Plastiques go up and down completely randomly.
Pair Corralation between Gaumont SA and Plastiques
Assuming the 90 days trading horizon Gaumont SA is expected to generate 0.42 times more return on investment than Plastiques. However, Gaumont SA is 2.37 times less risky than Plastiques. It trades about -0.03 of its potential returns per unit of risk. Plastiques du Val is currently generating about -0.09 per unit of risk. If you would invest 9,700 in Gaumont SA on September 1, 2024 and sell it today you would lose (1,150) from holding Gaumont SA or give up 11.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Gaumont SA vs. Plastiques du Val
Performance |
| Timeline |
| Gaumont SA |
| Plastiques du Val |
Gaumont SA and Plastiques Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaumont SA and Plastiques
The main advantage of trading using opposite Gaumont SA and Plastiques positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaumont SA position performs unexpectedly, Plastiques 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 Plastiques will offset losses from the drop in Plastiques' long position.| Gaumont SA vs. NRJ Group | Gaumont SA vs. Groupe Partouche SA | Gaumont SA vs. Passat Socit Anonyme | Gaumont SA vs. Jacques Bogart SA |
| Plastiques vs. Groupe Guillin SA | Plastiques vs. Groupe Partouche SA | Plastiques vs. Passat Socit Anonyme | Plastiques vs. Akwel 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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