Correlation Between Groupe JAJ and BigBen Interactive
Can any of the company-specific risk be diversified away by investing in both Groupe JAJ and BigBen Interactive 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 Groupe JAJ and BigBen Interactive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe JAJ and BigBen Interactive, you can compare the effects of market volatilities on Groupe JAJ and BigBen Interactive 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 Groupe JAJ with a short position of BigBen Interactive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe JAJ and BigBen Interactive.
Diversification Opportunities for Groupe JAJ and BigBen Interactive
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Groupe and BigBen is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Groupe JAJ and BigBen Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBen Interactive and Groupe JAJ 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 Groupe JAJ are associated (or correlated) with BigBen Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBen Interactive has no effect on the direction of Groupe JAJ i.e., Groupe JAJ and BigBen Interactive go up and down completely randomly.
Pair Corralation between Groupe JAJ and BigBen Interactive
Assuming the 90 days trading horizon Groupe JAJ is expected to generate 5.84 times more return on investment than BigBen Interactive. However, Groupe JAJ is 5.84 times more volatile than BigBen Interactive. It trades about -0.11 of its potential returns per unit of risk. BigBen Interactive is currently generating about -0.74 per unit of risk. If you would invest 90.00 in Groupe JAJ on August 30, 2024 and sell it today you would lose (30.00) from holding Groupe JAJ or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groupe JAJ vs. BigBen Interactive
Performance |
| Timeline |
| Groupe JAJ |
| BigBen Interactive |
Groupe JAJ and BigBen Interactive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe JAJ and BigBen Interactive
The main advantage of trading using opposite Groupe JAJ and BigBen Interactive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe JAJ position performs unexpectedly, BigBen Interactive 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 BigBen Interactive will offset losses from the drop in BigBen Interactive's long position.| Groupe JAJ vs. ACTEOS SA | Groupe JAJ vs. Augros Cosmetic Packaging | Groupe JAJ vs. BigBen Interactive | Groupe JAJ vs. Centrale dAchat Franaise |
| BigBen Interactive vs. Nacon Sa | BigBen Interactive vs. Chargeurs SA | BigBen Interactive vs. Claranova SE | BigBen Interactive vs. Trigano 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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