Correlation Between Plastiques and Gaumont SA
Can any of the company-specific risk be diversified away by investing in both Plastiques 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 Plastiques and Gaumont SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastiques du Val and Gaumont SA, you can compare the effects of market volatilities on Plastiques 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 Plastiques with a short position of Gaumont SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastiques and Gaumont SA.
Diversification Opportunities for Plastiques and Gaumont SA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Plastiques and Gaumont is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Plastiques du Val and Gaumont SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaumont SA and Plastiques 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 Plastiques du Val 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 Plastiques i.e., Plastiques and Gaumont SA go up and down completely randomly.
Pair Corralation between Plastiques and Gaumont SA
Assuming the 90 days trading horizon Plastiques du Val is expected to under-perform the Gaumont SA. In addition to that, Plastiques is 2.37 times more volatile than Gaumont SA. It trades about -0.09 of its total potential returns per unit of risk. Gaumont SA is currently generating about -0.03 per unit of volatility. If you would invest 9,700 in Gaumont SA on September 1, 2024 and sell it today you would lose (1,150) from holding Gaumont SA or give up 11.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Plastiques du Val vs. Gaumont SA
Performance |
| Timeline |
| Plastiques du Val |
| Gaumont SA |
Plastiques and Gaumont SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastiques and Gaumont SA
The main advantage of trading using opposite Plastiques and Gaumont SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastiques 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.| Plastiques vs. Groupe Guillin SA | Plastiques vs. Groupe Partouche SA | Plastiques vs. Passat Socit Anonyme | Plastiques vs. Akwel 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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