Correlation Between SRP Groupe and Maisons Du
Can any of the company-specific risk be diversified away by investing in both SRP Groupe and Maisons Du 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 SRP Groupe and Maisons Du into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SRP Groupe SA and Maisons du Monde, you can compare the effects of market volatilities on SRP Groupe and Maisons Du 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 SRP Groupe with a short position of Maisons Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRP Groupe and Maisons Du.
Diversification Opportunities for SRP Groupe and Maisons Du
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SRP and Maisons is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding SRP Groupe SA and Maisons du Monde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maisons du Monde and SRP Groupe 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 SRP Groupe SA are associated (or correlated) with Maisons Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maisons du Monde has no effect on the direction of SRP Groupe i.e., SRP Groupe and Maisons Du go up and down completely randomly.
Pair Corralation between SRP Groupe and Maisons Du
Assuming the 90 days trading horizon SRP Groupe SA is expected to generate 0.91 times more return on investment than Maisons Du. However, SRP Groupe SA is 1.1 times less risky than Maisons Du. It trades about -0.08 of its potential returns per unit of risk. Maisons du Monde is currently generating about -0.16 per unit of risk. If you would invest 103.00 in SRP Groupe SA on August 31, 2024 and sell it today you would lose (5.00) from holding SRP Groupe SA or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SRP Groupe SA vs. Maisons du Monde
Performance |
| Timeline |
| SRP Groupe SA |
| Maisons du Monde |
SRP Groupe and Maisons Du Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SRP Groupe and Maisons Du
The main advantage of trading using opposite SRP Groupe and Maisons Du positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SRP Groupe position performs unexpectedly, Maisons Du 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 Maisons Du will offset losses from the drop in Maisons Du's long position.| SRP Groupe vs. Maisons du Monde | SRP Groupe vs. Claranova SE | SRP Groupe vs. Solocal Group SA | SRP Groupe vs. Blockchain Group SA |
| Maisons Du vs. Fnac Darty SA | Maisons Du vs. Trigano SA | Maisons Du vs. Elis SA | Maisons Du vs. Derichebourg |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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