Correlation Between Virbac SA and Thermador Groupe
Can any of the company-specific risk be diversified away by investing in both Virbac SA and Thermador Groupe 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 Virbac SA and Thermador Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virbac SA and Thermador Groupe SA, you can compare the effects of market volatilities on Virbac SA and Thermador Groupe 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 Virbac SA with a short position of Thermador Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virbac SA and Thermador Groupe.
Diversification Opportunities for Virbac SA and Thermador Groupe
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virbac and Thermador is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Virbac SA and Thermador Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermador Groupe and Virbac SA 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 Virbac SA are associated (or correlated) with Thermador Groupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermador Groupe has no effect on the direction of Virbac SA i.e., Virbac SA and Thermador Groupe go up and down completely randomly.
Pair Corralation between Virbac SA and Thermador Groupe
Assuming the 90 days trading horizon Virbac SA is expected to generate 1.19 times more return on investment than Thermador Groupe. However, Virbac SA is 1.19 times more volatile than Thermador Groupe SA. It trades about 0.04 of its potential returns per unit of risk. Thermador Groupe SA is currently generating about -0.02 per unit of risk. If you would invest 24,638 in Virbac SA on August 26, 2024 and sell it today you would earn a total of 7,712 from holding Virbac SA or generate 31.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virbac SA vs. Thermador Groupe SA
Performance |
| Timeline |
| Virbac SA |
| Thermador Groupe |
Virbac SA and Thermador Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virbac SA and Thermador Groupe
The main advantage of trading using opposite Virbac SA and Thermador Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virbac SA position performs unexpectedly, Thermador Groupe 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 Thermador Groupe will offset losses from the drop in Thermador Groupe's long position.| Virbac SA vs. Vetoquinol | Virbac SA vs. Trigano SA | Virbac SA vs. Biomerieux SA | Virbac SA vs. Sartorius Stedim Biotech |
| Thermador Groupe vs. Stef SA | Thermador Groupe vs. Robertet SA | Thermador Groupe vs. Grard Perrier Industrie | Thermador Groupe vs. Aubay Socit Anonyme |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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