Correlation Between Poujoulat and Moulinvest

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

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

Diversification Opportunities for Poujoulat and Moulinvest

0.78

Correlation Coefficient

Poujoulat  Moulinvest

Poor diversification

The 3 months correlation between Poujoulat and Moulinvest is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Poujoulat SA and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest and Poujoulat 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 Poujoulat SA are associated (or correlated) with Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Poujoulat i.e., Poujoulat and Moulinvest go up and down completely randomly.

Pair Corralation between Poujoulat and Moulinvest

Assuming the 90 days trading horizon Poujoulat SA is expected to under-perform the Moulinvest. But the stock apears to be less risky and, when comparing its historical volatility, Poujoulat SA is 1.39 times less risky than Moulinvest. The stock trades about -0.15 of its potential returns per unit of risk. The Moulinvest is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  1,405  in Moulinvest on September 12, 2024 and sell it today you would lose (155.00) from holding Moulinvest or give up 11.03% of portfolio value over 90 days.

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

Poujoulat SA  vs.  Moulinvest

Poujoulat SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poujoulat SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest 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.

Pair Trading with Poujoulat and Moulinvest

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

The idea behind Poujoulat SA and Moulinvest 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .