Correlation Between Orapi SA and Saint Jean
Can any of the company-specific risk be diversified away by investing in both Orapi SA and Saint Jean 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 Saint Jean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orapi SA and Saint Jean Groupe, you can compare the effects of market volatilities on Orapi SA and Saint Jean 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 Saint Jean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orapi SA and Saint Jean.
Diversification Opportunities for Orapi SA and Saint Jean
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orapi and Saint is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Orapi SA and Saint Jean Groupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saint Jean Groupe 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 Saint Jean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saint Jean Groupe has no effect on the direction of Orapi SA i.e., Orapi SA and Saint Jean go up and down completely randomly.
Pair Corralation between Orapi SA and Saint Jean
Assuming the 90 days trading horizon Orapi SA is expected to generate 1.28 times more return on investment than Saint Jean. However, Orapi SA is 1.28 times more volatile than Saint Jean Groupe. It trades about 0.05 of its potential returns per unit of risk. Saint Jean Groupe is currently generating about -0.01 per unit of risk. If you would invest 580.00 in Orapi SA on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Orapi SA or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Orapi SA vs. Saint Jean Groupe
Performance |
| Timeline |
| Orapi SA |
| Saint Jean Groupe |
Orapi SA and Saint Jean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orapi SA and Saint Jean
The main advantage of trading using opposite Orapi SA and Saint Jean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orapi SA position performs unexpectedly, Saint Jean 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 Saint Jean will offset losses from the drop in Saint Jean's long position.The idea behind Orapi SA and Saint Jean Groupe 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.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 CEOs Directory module to screen CEOs from public companies around the world.
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