Correlation Between Compagnie and Groupe JAJ
Can any of the company-specific risk be diversified away by investing in both Compagnie and Groupe JAJ 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 Compagnie and Groupe JAJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie de Saint Gobain and Groupe JAJ, you can compare the effects of market volatilities on Compagnie and Groupe JAJ 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 Compagnie with a short position of Groupe JAJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Groupe JAJ.
Diversification Opportunities for Compagnie and Groupe JAJ
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compagnie and Groupe is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie de Saint Gobain and Groupe JAJ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe JAJ and Compagnie 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 Compagnie de Saint Gobain are associated (or correlated) with Groupe JAJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe JAJ has no effect on the direction of Compagnie i.e., Compagnie and Groupe JAJ go up and down completely randomly.
Pair Corralation between Compagnie and Groupe JAJ
Assuming the 90 days trading horizon Compagnie de Saint Gobain is expected to generate 0.15 times more return on investment than Groupe JAJ. However, Compagnie de Saint Gobain is 6.57 times less risky than Groupe JAJ. It trades about 0.13 of its potential returns per unit of risk. Groupe JAJ is currently generating about -0.11 per unit of risk. If you would invest 8,242 in Compagnie de Saint Gobain on August 30, 2024 and sell it today you would earn a total of 364.00 from holding Compagnie de Saint Gobain or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie de Saint Gobain vs. Groupe JAJ
Performance |
| Timeline |
| Compagnie de Saint |
| Groupe JAJ |
Compagnie and Groupe JAJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie and Groupe JAJ
The main advantage of trading using opposite Compagnie and Groupe JAJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie position performs unexpectedly, Groupe JAJ 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 JAJ will offset losses from the drop in Groupe JAJ's long position.The idea behind Compagnie de Saint Gobain and Groupe JAJ 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 JAJ vs. ACTEOS SA | Groupe JAJ vs. Augros Cosmetic Packaging | Groupe JAJ vs. BigBen Interactive | Groupe JAJ vs. Centrale dAchat Franaise |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |