Correlation Between Gaussin and Graines Voltz

Can any of the company-specific risk be diversified away by investing in both Gaussin and Graines Voltz 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 Gaussin and Graines Voltz into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gaussin and Graines Voltz SA, you can compare the effects of market volatilities on Gaussin and Graines Voltz 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 Gaussin with a short position of Graines Voltz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaussin and Graines Voltz.

Diversification Opportunities for Gaussin and Graines Voltz

0.19

Correlation Coefficient

Gaussin  Graines Voltz

Average diversification

The 3 months correlation between Gaussin and Graines is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gaussin and Graines Voltz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graines Voltz SA and Gaussin 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 Gaussin are associated (or correlated) with Graines Voltz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graines Voltz SA has no effect on the direction of Gaussin i.e., Gaussin and Graines Voltz go up and down completely randomly.

Pair Corralation between Gaussin and Graines Voltz

Assuming the 90 days trading horizon Gaussin is expected to under-perform the Graines Voltz. In addition to that, Gaussin is 4.87 times more volatile than Graines Voltz SA. It trades about -0.02 of its total potential returns per unit of risk. Graines Voltz SA is currently generating about -0.04 per unit of volatility. If you would invest  3,800  in Graines Voltz SA on September 24, 2024 and sell it today you would lose (1,650) from holding Graines Voltz SA or give up 43.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gaussin  vs.  Graines Voltz SA

Gaussin

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gaussin are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Gaussin reported solid returns over the last few months and may actually be approaching a breakup point.

Graines Voltz SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graines Voltz SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Gaussin and Graines Voltz

The main advantage of trading using opposite Gaussin and Graines Voltz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaussin position performs unexpectedly, Graines Voltz 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 Graines Voltz will offset losses from the drop in Graines Voltz's long position.

The idea behind Gaussin and Graines Voltz 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.