Correlation Between Signaux Girod and Groupe Partouche

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

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

Diversification Opportunities for Signaux Girod and Groupe Partouche

0.33

Correlation Coefficient

Signaux Girod  Groupe Partouche

Weak diversification

The 3 months correlation between Signaux and Groupe is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Signaux Girod and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Signaux Girod 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 Signaux Girod are associated (or correlated) with Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Signaux Girod i.e., Signaux Girod and Groupe Partouche go up and down completely randomly.

Pair Corralation between Signaux Girod and Groupe Partouche

Assuming the 90 days trading horizon Signaux Girod is expected to generate 5.17 times less return on investment than Groupe Partouche. But when comparing it to its historical volatility, Signaux Girod is 1.27 times less risky than Groupe Partouche. It trades about 0.02 of its potential returns per unit of risk. Groupe Partouche SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,890  in Groupe Partouche SA on September 12, 2024 and sell it today you would earn a total of  210.00  from holding Groupe Partouche SA or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Signaux Girod  vs.  Groupe Partouche SA

Signaux Girod

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Signaux Girod are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Signaux Girod is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Groupe Partouche

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Partouche SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe Partouche may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Signaux Girod and Groupe Partouche

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

The idea behind Signaux Girod and Groupe Partouche 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..