Correlation Between Orapi SA and Casino Guichard
Can any of the company-specific risk be diversified away by investing in both Orapi SA and Casino Guichard 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 Orapi SA and Casino Guichard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orapi SA and Casino Guichard Perrachon, you can compare the effects of market volatilities on Orapi SA and Casino Guichard 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 Orapi SA with a short position of Casino Guichard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orapi SA and Casino Guichard.
Diversification Opportunities for Orapi SA and Casino Guichard
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orapi and Casino is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Casino Guichard Perrachon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casino Guichard Perrachon and Orapi SA 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 Orapi SA are associated (or correlated) with Casino Guichard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casino Guichard Perrachon has no effect on the direction of Orapi SA i.e., Orapi SA and Casino Guichard go up and down completely randomly.
Pair Corralation between Orapi SA and Casino Guichard
Assuming the 90 days trading horizon Orapi SA is expected to generate 0.46 times more return on investment than Casino Guichard. However, Orapi SA is 2.18 times less risky than Casino Guichard. It trades about 0.03 of its potential returns per unit of risk. Casino Guichard Perrachon is currently generating about -0.15 per unit of risk. If you would invest 616.00 in Orapi SA on September 2, 2024 and sell it today you would earn a total of 34.00 from holding Orapi SA or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orapi SA vs. Casino Guichard Perrachon
Performance |
| Timeline |
| Orapi SA |
| Casino Guichard Perrachon |
Orapi SA and Casino Guichard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orapi SA and Casino Guichard
The main advantage of trading using opposite Orapi SA and Casino Guichard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orapi SA position performs unexpectedly, Casino Guichard 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 Casino Guichard will offset losses from the drop in Casino Guichard's long position.The idea behind Orapi SA and Casino Guichard Perrachon 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.| Casino Guichard vs. Danone SA | Casino Guichard vs. Renault SA | Casino Guichard vs. AXA SA | Casino Guichard vs. Compagnie de Saint Gobain |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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