Correlation Between GEA Grenobl and Graines Voltz
Can any of the company-specific risk be diversified away by investing in both GEA Grenobl and Graines Voltz 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 Grenobl and Graines Voltz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEA Grenobl Elect and Graines Voltz SA, you can compare the effects of market volatilities on GEA Grenobl and Graines Voltz 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 Grenobl with a short position of Graines Voltz. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEA Grenobl and Graines Voltz.
Diversification Opportunities for GEA Grenobl and Graines Voltz
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEA and Graines is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GEA Grenobl Elect and Graines Voltz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graines Voltz SA and GEA Grenobl 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 Grenobl Elect are associated (or correlated) with Graines Voltz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graines Voltz SA has no effect on the direction of GEA Grenobl i.e., GEA Grenobl and Graines Voltz go up and down completely randomly.
Pair Corralation between GEA Grenobl and Graines Voltz
Assuming the 90 days trading horizon GEA Grenobl Elect is expected to generate 0.45 times more return on investment than Graines Voltz. However, GEA Grenobl Elect is 2.24 times less risky than Graines Voltz. It trades about -0.46 of its potential returns per unit of risk. Graines Voltz SA is currently generating about -0.48 per unit of risk. If you would invest 7,500 in GEA Grenobl Elect on August 30, 2024 and sell it today you would lose (450.00) from holding GEA Grenobl Elect or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
GEA Grenobl Elect vs. Graines Voltz SA
Performance |
| Timeline |
| GEA Grenobl Elect |
| Graines Voltz SA |
GEA Grenobl and Graines Voltz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEA Grenobl and Graines Voltz
The main advantage of trading using opposite GEA Grenobl and Graines Voltz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEA Grenobl position performs unexpectedly, Graines Voltz 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 Graines Voltz will offset losses from the drop in Graines Voltz's long position.| GEA Grenobl vs. Graines Voltz SA | GEA Grenobl vs. Linedata Services SA | GEA Grenobl vs. Gevelot | GEA Grenobl vs. Lacroix Group SA |
| Graines Voltz vs. Jacques Bogart SA | Graines Voltz vs. Piscines Desjoyaux SA | Graines Voltz vs. Plastiques du Val | Graines Voltz vs. Robertet 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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