Correlation Between Carrefour and Carrefour

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

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

Diversification Opportunities for Carrefour and Carrefour

0.67

Correlation Coefficient

Carrefour  Carrefour

Poor diversification

The 3 months correlation between Carrefour and Carrefour is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA PK and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA and Carrefour 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 Carrefour SA PK are associated (or correlated) with Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of Carrefour i.e., Carrefour and Carrefour go up and down completely randomly.

Pair Corralation between Carrefour and Carrefour

Assuming the 90 days horizon Carrefour SA PK is expected to under-perform the Carrefour. But the pink sheet apears to be less risky and, when comparing its historical volatility, Carrefour SA PK is 1.2 times less risky than Carrefour. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Carrefour SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,585  in Carrefour SA on September 2, 2024 and sell it today you would lose (12.00) from holding Carrefour SA or give up 0.76% of portfolio value over 90 days.

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

Carrefour SA PK  vs.  Carrefour SA

Carrefour SA PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrefour SA PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Carrefour is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Carrefour SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carrefour SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Carrefour is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carrefour and Carrefour

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

The idea behind Carrefour SA PK and Carrefour 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.