Correlation Between Guerbet S and Assystem
Can any of the company-specific risk be diversified away by investing in both Guerbet S and Assystem 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 Guerbet S and Assystem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guerbet S A and Assystem SA, you can compare the effects of market volatilities on Guerbet S and Assystem 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 Guerbet S with a short position of Assystem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Assystem.
Diversification Opportunities for Guerbet S and Assystem
Poor diversification
The 3 months correlation between Guerbet and Assystem is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Assystem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assystem SA and Guerbet S 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 Guerbet S A are associated (or correlated) with Assystem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assystem SA has no effect on the direction of Guerbet S i.e., Guerbet S and Assystem go up and down completely randomly.
Pair Corralation between Guerbet S and Assystem
Assuming the 90 days trading horizon Guerbet S A is expected to generate 1.19 times more return on investment than Assystem. However, Guerbet S is 1.19 times more volatile than Assystem SA. It trades about 0.06 of its potential returns per unit of risk. Assystem SA is currently generating about 0.0 per unit of risk. If you would invest 1,875 in Guerbet S A on August 26, 2024 and sell it today you would earn a total of 745.00 from holding Guerbet S A or generate 39.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guerbet S A vs. Assystem SA
Performance |
| Timeline |
| Guerbet S A |
| Assystem SA |
Guerbet S and Assystem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guerbet S and Assystem
The main advantage of trading using opposite Guerbet S and Assystem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guerbet S position performs unexpectedly, Assystem 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 Assystem will offset losses from the drop in Assystem's long position.The idea behind Guerbet S A and Assystem SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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