Correlation Between SA Catana and Piscines Desjoyaux

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

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

Diversification Opportunities for SA Catana and Piscines Desjoyaux

-0.08

Correlation Coefficient

SA Catana  Piscines Desjoyaux

Good diversification

The 3 months correlation between CATG and Piscines is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SA Catana Group and Piscines Desjoyaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piscines Desjoyaux and SA Catana 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 SA Catana Group are associated (or correlated) with Piscines Desjoyaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piscines Desjoyaux has no effect on the direction of SA Catana i.e., SA Catana and Piscines Desjoyaux go up and down completely randomly.

Pair Corralation between SA Catana and Piscines Desjoyaux

Assuming the 90 days trading horizon SA Catana Group is expected to under-perform the Piscines Desjoyaux. In addition to that, SA Catana is 1.9 times more volatile than Piscines Desjoyaux SA. It trades about -0.08 of its total potential returns per unit of risk. Piscines Desjoyaux SA is currently generating about -0.03 per unit of volatility. If you would invest  1,250  in Piscines Desjoyaux SA on September 3, 2024 and sell it today you would lose (30.00) from holding Piscines Desjoyaux SA or give up 2.4% of portfolio value over 90 days.

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

SA Catana Group  vs.  Piscines Desjoyaux SA

SA Catana Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SA Catana Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with SA Catana and Piscines Desjoyaux

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

The idea behind SA Catana Group and Piscines Desjoyaux 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.