Correlation Between Reliance Steel and Groupama Entreprises
Specify exactly 2 symbols:
By analyzing existing cross correlation between Reliance Steel Aluminum and Groupama Entreprises N, you can compare the effects of market volatilities on Reliance Steel and Groupama Entreprises 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 Reliance Steel with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reliance Steel and Groupama Entreprises.
Diversification Opportunities for Reliance Steel and Groupama Entreprises
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Reliance and Groupama is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Reliance Steel Aluminum and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Reliance Steel 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 Reliance Steel Aluminum are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Reliance Steel i.e., Reliance Steel and Groupama Entreprises go up and down completely randomly.
Pair Corralation between Reliance Steel and Groupama Entreprises
Assuming the 90 days horizon Reliance Steel Aluminum is expected to generate 227.91 times more return on investment than Groupama Entreprises. However, Reliance Steel is 227.91 times more volatile than Groupama Entreprises N. It trades about 0.25 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.96 per unit of risk. If you would invest 26,491 in Reliance Steel Aluminum on September 1, 2024 and sell it today you would earn a total of 3,989 from holding Reliance Steel Aluminum or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reliance Steel Aluminum vs. Groupama Entreprises N
Performance |
| Timeline |
| Reliance Steel Aluminum |
| Groupama Entreprises |
Reliance Steel and Groupama Entreprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reliance Steel and Groupama Entreprises
The main advantage of trading using opposite Reliance Steel and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reliance Steel position performs unexpectedly, Groupama Entreprises 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 Groupama Entreprises will offset losses from the drop in Groupama Entreprises' long position.The idea behind Reliance Steel Aluminum and Groupama Entreprises N 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.| Groupama Entreprises vs. Lyxor 1 | Groupama Entreprises vs. Xtrackers LevDAX | Groupama Entreprises vs. Xtrackers ShortDAX |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stocks Directory Find actively traded stocks across global markets |