Correlation Between Lucibel and Grard Perrier

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

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

Diversification Opportunities for Lucibel and Grard Perrier

-0.06

Correlation Coefficient

Lucibel  Grard Perrier

Good diversification

The 3 months correlation between Lucibel and Grard is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lucibel and Grard Perrier Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grard Perrier Industrie and Lucibel 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 Lucibel are associated (or correlated) with Grard Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grard Perrier Industrie has no effect on the direction of Lucibel i.e., Lucibel and Grard Perrier go up and down completely randomly.

Pair Corralation between Lucibel and Grard Perrier

Assuming the 90 days trading horizon Lucibel is expected to under-perform the Grard Perrier. In addition to that, Lucibel is 5.53 times more volatile than Grard Perrier Industrie. It trades about -0.11 of its total potential returns per unit of risk. Grard Perrier Industrie is currently generating about -0.01 per unit of volatility. If you would invest  8,780  in Grard Perrier Industrie on September 26, 2024 and sell it today you would lose (100.00) from holding Grard Perrier Industrie or give up 1.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Lucibel  vs.  Grard Perrier Industrie

Lucibel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucibel 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.

Grard Perrier Industrie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grard Perrier Industrie has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Grard Perrier is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lucibel and Grard Perrier

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

The idea behind Lucibel and Grard Perrier Industrie 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.