Correlation Between Graines Voltz and Esso SAF
Can any of the company-specific risk be diversified away by investing in both Graines Voltz and Esso SAF 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 Graines Voltz and Esso SAF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graines Voltz SA and Esso SAF, you can compare the effects of market volatilities on Graines Voltz and Esso SAF 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 Graines Voltz with a short position of Esso SAF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graines Voltz and Esso SAF.
Diversification Opportunities for Graines Voltz and Esso SAF
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Graines and Esso is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Graines Voltz SA and Esso SAF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso SAF and Graines Voltz 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 Graines Voltz SA are associated (or correlated) with Esso SAF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso SAF has no effect on the direction of Graines Voltz i.e., Graines Voltz and Esso SAF go up and down completely randomly.
Pair Corralation between Graines Voltz and Esso SAF
Assuming the 90 days trading horizon Graines Voltz SA is expected to generate 0.69 times more return on investment than Esso SAF. However, Graines Voltz SA is 1.45 times less risky than Esso SAF. It trades about -0.1 of its potential returns per unit of risk. Esso SAF is currently generating about -0.12 per unit of risk. If you would invest 2,750 in Graines Voltz SA on September 5, 2024 and sell it today you would lose (790.00) from holding Graines Voltz SA or give up 28.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graines Voltz SA vs. Esso SAF
Performance |
| Timeline |
| Graines Voltz SA |
| Esso SAF |
Graines Voltz and Esso SAF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graines Voltz and Esso SAF
The main advantage of trading using opposite Graines Voltz and Esso SAF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graines Voltz position performs unexpectedly, Esso SAF 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 Esso SAF will offset losses from the drop in Esso SAF's long position.| Graines Voltz vs. Jacques Bogart SA | Graines Voltz vs. Piscines Desjoyaux SA | Graines Voltz vs. Plastiques du Val | Graines Voltz vs. Robertet SA |
| Esso SAF vs. Etablissements Maurel et | Esso SAF vs. Eramet SA | Esso SAF vs. Socit BIC SA | Esso SAF vs. TotalEnergies EP Gabon |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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