Correlation Between Verallia and Thermador Groupe
Can any of the company-specific risk be diversified away by investing in both Verallia 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 Verallia and Thermador Groupe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verallia and Thermador Groupe SA, you can compare the effects of market volatilities on Verallia 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 Verallia with a short position of Thermador Groupe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verallia and Thermador Groupe.
Diversification Opportunities for Verallia and Thermador Groupe
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Verallia and Thermador is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Verallia and Thermador Groupe SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermador Groupe and Verallia 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 Verallia 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 Verallia i.e., Verallia and Thermador Groupe go up and down completely randomly.
Pair Corralation between Verallia and Thermador Groupe
Assuming the 90 days trading horizon Verallia is expected to generate 1.22 times more return on investment than Thermador Groupe. However, Verallia is 1.22 times more volatile than Thermador Groupe SA. It trades about -0.02 of its potential returns per unit of risk. Thermador Groupe SA is currently generating about -0.03 per unit of risk. If you would invest 3,297 in Verallia on August 31, 2024 and sell it today you would lose (781.00) from holding Verallia or give up 23.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verallia vs. Thermador Groupe SA
Performance |
| Timeline |
| Verallia |
| Thermador Groupe |
Verallia and Thermador Groupe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verallia and Thermador Groupe
The main advantage of trading using opposite Verallia and Thermador Groupe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verallia 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.| Verallia vs. Gaztransport Technigaz SAS | Verallia vs. Imerys SA | Verallia vs. Amundi SA | Verallia vs. Rubis SCA |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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