Correlation Between Casino Guichard and Derichebourg

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

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

Diversification Opportunities for Casino Guichard and Derichebourg

0.72

Correlation Coefficient

Casino Guichard  Derichebourg

Poor diversification

The 3 months correlation between Casino and Derichebourg is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Casino Guichard Perrachon and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Casino Guichard 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 Casino Guichard Perrachon are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Casino Guichard i.e., Casino Guichard and Derichebourg go up and down completely randomly.

Pair Corralation between Casino Guichard and Derichebourg

Assuming the 90 days horizon Casino Guichard Perrachon is expected to under-perform the Derichebourg. In addition to that, Casino Guichard is 2.28 times more volatile than Derichebourg. It trades about -0.23 of its total potential returns per unit of risk. Derichebourg is currently generating about 0.02 per unit of volatility. If you would invest  518.00  in Derichebourg on September 13, 2024 and sell it today you would earn a total of  7.00  from holding Derichebourg or generate 1.35% return on investment over 90 days.

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

Casino Guichard Perrachon  vs.  Derichebourg

Casino Guichard Perrachon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Casino Guichard Perrachon 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 basic 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.

Derichebourg

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Derichebourg are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Derichebourg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Casino Guichard and Derichebourg

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

The idea behind Casino Guichard Perrachon and Derichebourg 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.