Correlation Between Derichebourg and Casino Guichard

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

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

Diversification Opportunities for Derichebourg and Casino Guichard

0.73

Correlation Coefficient

Derichebourg  Casino Guichard

Poor diversification

The 3 months correlation between Derichebourg and Casino is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Derichebourg and Casino Guichard Perrachon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casino Guichard Perrachon and Derichebourg 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 Derichebourg are associated (or correlated) with Casino Guichard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casino Guichard Perrachon has no effect on the direction of Derichebourg i.e., Derichebourg and Casino Guichard go up and down completely randomly.

Pair Corralation between Derichebourg and Casino Guichard

Assuming the 90 days trading horizon Derichebourg is expected to generate 0.44 times more return on investment than Casino Guichard. However, Derichebourg is 2.29 times less risky than Casino Guichard. It trades about 0.02 of its potential returns per unit of risk. Casino Guichard Perrachon is currently generating about -0.23 per unit of risk. If you would invest  499.00  in Derichebourg on September 12, 2024 and sell it today you would earn a total of  2.00  from holding Derichebourg or generate 0.4% return on investment over 90 days.

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

Derichebourg  vs.  Casino Guichard Perrachon

Derichebourg

Risk-Adjusted Performance

1 of 100

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.

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.

Pair Trading with Derichebourg and Casino Guichard

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

The idea behind Derichebourg and Casino Guichard Perrachon 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.