Correlation Between Grard Perrier and Broadpeak
Can any of the company-specific risk be diversified away by investing in both Grard Perrier and Broadpeak 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 Grard Perrier and Broadpeak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grard Perrier Industrie and Broadpeak SA, you can compare the effects of market volatilities on Grard Perrier and Broadpeak 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 Grard Perrier with a short position of Broadpeak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grard Perrier and Broadpeak.
Diversification Opportunities for Grard Perrier and Broadpeak
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grard and Broadpeak is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Grard Perrier Industrie and Broadpeak SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadpeak SA and Grard Perrier 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 Grard Perrier Industrie are associated (or correlated) with Broadpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadpeak SA has no effect on the direction of Grard Perrier i.e., Grard Perrier and Broadpeak go up and down completely randomly.
Pair Corralation between Grard Perrier and Broadpeak
Assuming the 90 days trading horizon Grard Perrier Industrie is expected to generate 0.36 times more return on investment than Broadpeak. However, Grard Perrier Industrie is 2.78 times less risky than Broadpeak. It trades about -0.05 of its potential returns per unit of risk. Broadpeak SA is currently generating about -0.11 per unit of risk. If you would invest 9,852 in Grard Perrier Industrie on November 3, 2024 and sell it today you would lose (1,612) from holding Grard Perrier Industrie or give up 16.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grard Perrier Industrie vs. Broadpeak SA
Performance |
| Timeline |
| Grard Perrier Industrie |
| Broadpeak SA |
Grard Perrier and Broadpeak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grard Perrier and Broadpeak
The main advantage of trading using opposite Grard Perrier and Broadpeak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grard Perrier position performs unexpectedly, Broadpeak 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 Broadpeak will offset losses from the drop in Broadpeak's long position.The idea behind Grard Perrier Industrie and Broadpeak SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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