Correlation Between Synergie and Groupe CRIT
Can any of the company-specific risk be diversified away by investing in both Synergie and Groupe CRIT 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 Synergie and Groupe CRIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synergie SE and Groupe CRIT SA, you can compare the effects of market volatilities on Synergie and Groupe CRIT 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 Synergie with a short position of Groupe CRIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synergie and Groupe CRIT.
Diversification Opportunities for Synergie and Groupe CRIT
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Synergie and Groupe is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Synergie SE and Groupe CRIT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe CRIT SA and Synergie 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 Synergie SE are associated (or correlated) with Groupe CRIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe CRIT SA has no effect on the direction of Synergie i.e., Synergie and Groupe CRIT go up and down completely randomly.
Pair Corralation between Synergie and Groupe CRIT
Assuming the 90 days trading horizon Synergie SE is expected to under-perform the Groupe CRIT. But the stock apears to be less risky and, when comparing its historical volatility, Synergie SE is 1.84 times less risky than Groupe CRIT. The stock trades about -0.32 of its potential returns per unit of risk. The Groupe CRIT SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 6,700 in Groupe CRIT SA on August 29, 2024 and sell it today you would lose (200.00) from holding Groupe CRIT SA or give up 2.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Synergie SE vs. Groupe CRIT SA
Performance |
| Timeline |
| Synergie SE |
| Groupe CRIT SA |
Synergie and Groupe CRIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synergie and Groupe CRIT
The main advantage of trading using opposite Synergie and Groupe CRIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synergie position performs unexpectedly, Groupe CRIT 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 Groupe CRIT will offset losses from the drop in Groupe CRIT's long position.The idea behind Synergie SE and Groupe CRIT 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.| Groupe CRIT vs. Synergie SE | Groupe CRIT vs. Alten SA | Groupe CRIT vs. Manitou BF SA | Groupe CRIT vs. Linedata Services 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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