Correlation Between Groupe Partouche and Gaumont SA
Can any of the company-specific risk be diversified away by investing in both Groupe Partouche and Gaumont SA 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 Partouche and Gaumont SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe Partouche SA and Gaumont SA, you can compare the effects of market volatilities on Groupe Partouche and Gaumont SA 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 Partouche with a short position of Gaumont SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Partouche and Gaumont SA.
Diversification Opportunities for Groupe Partouche and Gaumont SA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Groupe and Gaumont is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Partouche SA and Gaumont SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaumont SA and Groupe Partouche 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 Partouche SA are associated (or correlated) with Gaumont SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaumont SA has no effect on the direction of Groupe Partouche i.e., Groupe Partouche and Gaumont SA go up and down completely randomly.
Pair Corralation between Groupe Partouche and Gaumont SA
Assuming the 90 days trading horizon Groupe Partouche SA is expected to generate 1.28 times more return on investment than Gaumont SA. However, Groupe Partouche is 1.28 times more volatile than Gaumont SA. It trades about 0.01 of its potential returns per unit of risk. Gaumont SA is currently generating about -0.03 per unit of risk. If you would invest 2,067 in Groupe Partouche SA on August 26, 2024 and sell it today you would earn a total of 13.00 from holding Groupe Partouche SA or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.01% |
| Values | Daily Returns |
Groupe Partouche SA vs. Gaumont SA
Performance |
| Timeline |
| Groupe Partouche |
| Gaumont SA |
Groupe Partouche and Gaumont SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groupe Partouche and Gaumont SA
The main advantage of trading using opposite Groupe Partouche and Gaumont SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Partouche position performs unexpectedly, Gaumont SA 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 Gaumont SA will offset losses from the drop in Gaumont SA's long position.| Groupe Partouche vs. Passat Socit Anonyme | Groupe Partouche vs. Plastiques du Val | Groupe Partouche vs. NRJ Group | Groupe Partouche vs. Haulotte Group SA |
| Gaumont SA vs. NRJ Group | Gaumont SA vs. Groupe Partouche SA | Gaumont SA vs. Passat Socit Anonyme | Gaumont SA vs. Jacques Bogart 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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