Correlation Between Piscines Desjoyaux and Plastiques

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

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

Diversification Opportunities for Piscines Desjoyaux and Plastiques

0.5

Correlation Coefficient

Piscines Desjoyaux  Plastiques

Very weak diversification

The 3 months correlation between Piscines and Plastiques is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Piscines Desjoyaux SA and Plastiques du Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastiques du Val and Piscines Desjoyaux 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 Piscines Desjoyaux SA are associated (or correlated) with Plastiques. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastiques du Val has no effect on the direction of Piscines Desjoyaux i.e., Piscines Desjoyaux and Plastiques go up and down completely randomly.

Pair Corralation between Piscines Desjoyaux and Plastiques

Assuming the 90 days trading horizon Piscines Desjoyaux SA is expected to generate 0.69 times more return on investment than Plastiques. However, Piscines Desjoyaux SA is 1.45 times less risky than Plastiques. It trades about -0.01 of its potential returns per unit of risk. Plastiques du Val is currently generating about -0.14 per unit of risk. If you would invest  1,180  in Piscines Desjoyaux SA on September 5, 2024 and sell it today you would lose (5.00) from holding Piscines Desjoyaux SA or give up 0.42% of portfolio value over 90 days.

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

Piscines Desjoyaux SA  vs.  Plastiques du Val

Piscines Desjoyaux

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Piscines Desjoyaux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Piscines Desjoyaux is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Plastiques du Val

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plastiques du Val 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 essential 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 Piscines Desjoyaux and Plastiques

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

The idea behind Piscines Desjoyaux SA and Plastiques du Val 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.