Correlation Between Bnteau SA and Groupe Partouche

Can any of the company-specific risk be diversified away by investing in both Bnteau 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 Bnteau 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 Bnteau SA and Groupe Partouche SA, you can compare the effects of market volatilities on Bnteau 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 Bnteau SA with a short position of Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bnteau SA and Groupe Partouche.

Diversification Opportunities for Bnteau SA and Groupe Partouche

0.54

Correlation Coefficient

Bnteau SA  Groupe Partouche

Very weak diversification

The 3 months correlation between Bnteau and Groupe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bnteau 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 Bnteau 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 Bnteau 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 Bnteau SA i.e., Bnteau SA and Groupe Partouche go up and down completely randomly.

Pair Corralation between Bnteau SA and Groupe Partouche

Assuming the 90 days trading horizon Bnteau SA is expected to under-perform the Groupe Partouche. In addition to that, Bnteau SA is 1.44 times more volatile than Groupe Partouche SA. It trades about -0.42 of its total potential returns per unit of risk. Groupe Partouche SA is currently generating about -0.02 per unit of volatility. If you would invest  2,090  in Groupe Partouche SA on September 5, 2024 and sell it today you would lose (20.00) from holding Groupe Partouche SA or give up 0.96% of portfolio value over 90 days.

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

Bnteau SA  vs.  Groupe Partouche SA

Bnteau SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Groupe Partouche

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Partouche SA are ranked lower than 6 (%) 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 Bnteau SA and Groupe Partouche

The main advantage of trading using opposite Bnteau SA and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bnteau 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 Bnteau 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.