Correlation Between Groupe Minoteries and Carlo Gavazzi

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Can any of the company-specific risk be diversified away by investing in both Groupe Minoteries and Carlo Gavazzi 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 Groupe Minoteries and Carlo Gavazzi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupe Minoteries SA and Carlo Gavazzi Holding, you can compare the effects of market volatilities on Groupe Minoteries and Carlo Gavazzi 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 Groupe Minoteries with a short position of Carlo Gavazzi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Minoteries and Carlo Gavazzi.

Diversification Opportunities for Groupe Minoteries and Carlo Gavazzi

GroupeCarloDiversified AwayGroupeCarloDiversified Away100%
-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Groupe and Carlo is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Minoteries SA and Carlo Gavazzi Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlo Gavazzi Holding and Groupe Minoteries 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 Groupe Minoteries SA are associated (or correlated) with Carlo Gavazzi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlo Gavazzi Holding has no effect on the direction of Groupe Minoteries i.e., Groupe Minoteries and Carlo Gavazzi go up and down completely randomly.

Pair Corralation between Groupe Minoteries and Carlo Gavazzi

Assuming the 90 days trading horizon Groupe Minoteries SA is expected to generate 0.85 times more return on investment than Carlo Gavazzi. However, Groupe Minoteries SA is 1.18 times less risky than Carlo Gavazzi. It trades about 0.17 of its potential returns per unit of risk. Carlo Gavazzi Holding is currently generating about -0.11 per unit of risk. If you would invest  22,000  in Groupe Minoteries SA on September 27, 2024 and sell it today you would earn a total of  4,800  from holding Groupe Minoteries SA or generate 21.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy96.72%
ValuesDaily Returns

Groupe Minoteries SA  vs.  Carlo Gavazzi Holding

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-505
JavaScript chart by amCharts 3.21.15GMI GAV
       Timeline  
Groupe Minoteries 

Risk-Adjusted Performance

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Strong
Good
Over the last 90 days Groupe Minoteries SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak forward indicators, Groupe Minoteries showed solid returns over the last few months and may actually be approaching a breakup point.
Carlo Gavazzi Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Carlo Gavazzi Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec190200210220230240

Groupe Minoteries and Carlo Gavazzi Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.63-4.96-3.3-1.64-0.02771.753.555.367.178.98 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15GMI GAV
       Returns  

Pair Trading with Groupe Minoteries and Carlo Gavazzi

The main advantage of trading using opposite Groupe Minoteries and Carlo Gavazzi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupe Minoteries position performs unexpectedly, Carlo Gavazzi 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 Carlo Gavazzi will offset losses from the drop in Carlo Gavazzi's long position.
The idea behind Groupe Minoteries SA and Carlo Gavazzi Holding 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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