Correlation Between Herige SA and Groupe Partouche

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

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

Diversification Opportunities for Herige SA and Groupe Partouche

-0.38

Correlation Coefficient

Herige SA  Groupe Partouche

Very good diversification

The 3 months correlation between Herige and Groupe is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Herige SA and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Herige 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 Herige SA 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 Herige SA i.e., Herige SA and Groupe Partouche go up and down completely randomly.

Pair Corralation between Herige SA and Groupe Partouche

Assuming the 90 days trading horizon Herige SA is expected to under-perform the Groupe Partouche. But the stock apears to be less risky and, when comparing its historical volatility, Herige SA is 1.07 times less risky than Groupe Partouche. The stock trades about -0.09 of its potential returns per unit of risk. The Groupe Partouche SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,905  in Groupe Partouche SA on September 4, 2024 and sell it today you would earn a total of  145.00  from holding Groupe Partouche SA or generate 7.61% return on investment over 90 days.

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

Herige SA  vs.  Groupe Partouche SA

Herige SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Herige SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Groupe Partouche

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Partouche SA are ranked lower than 5 (%) 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 Herige SA and Groupe Partouche

The main advantage of trading using opposite Herige SA and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herige SA 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 Herige SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.