Correlation Between Malteries Franco and Grard Perrier
Can any of the company-specific risk be diversified away by investing in both Malteries Franco and Grard Perrier 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 Malteries Franco and Grard Perrier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malteries Franco Belges Socit and Grard Perrier Industrie, you can compare the effects of market volatilities on Malteries Franco and Grard Perrier 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 Malteries Franco with a short position of Grard Perrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malteries Franco and Grard Perrier.
Diversification Opportunities for Malteries Franco and Grard Perrier
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Malteries and Grard is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Malteries Franco Belges Socit and Grard Perrier Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grard Perrier Industrie and Malteries Franco 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 Malteries Franco Belges Socit are associated (or correlated) with Grard Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grard Perrier Industrie has no effect on the direction of Malteries Franco i.e., Malteries Franco and Grard Perrier go up and down completely randomly.
Pair Corralation between Malteries Franco and Grard Perrier
Assuming the 90 days trading horizon Malteries Franco Belges Socit is expected to generate 1.0 times more return on investment than Grard Perrier. However, Malteries Franco Belges Socit is 1.0 times less risky than Grard Perrier. It trades about 0.07 of its potential returns per unit of risk. Grard Perrier Industrie is currently generating about -0.02 per unit of risk. If you would invest 64,500 in Malteries Franco Belges Socit on August 26, 2024 and sell it today you would earn a total of 8,000 from holding Malteries Franco Belges Socit or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malteries Franco Belges Socit vs. Grard Perrier Industrie
Performance |
| Timeline |
| Malteries Franco Belges |
| Grard Perrier Industrie |
Malteries Franco and Grard Perrier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malteries Franco and Grard Perrier
The main advantage of trading using opposite Malteries Franco and Grard Perrier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malteries Franco position performs unexpectedly, Grard Perrier 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 Grard Perrier will offset losses from the drop in Grard Perrier's long position.| Malteries Franco vs. Remy Cointreau | Malteries Franco vs. Interparfums SA | Malteries Franco vs. Guerbet S A | Malteries Franco vs. Societe LDC SA |
| Grard Perrier vs. Thermador Groupe SA | Grard Perrier vs. Robertet SA | Grard Perrier vs. Samse SA | Grard Perrier vs. Tonnellerie Francois Freres |
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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