Correlation Between Patrimoine and Groupe Partouche

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

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

Diversification Opportunities for Patrimoine and Groupe Partouche

0.73

Correlation Coefficient

Patrimoine  Groupe Partouche

Poor diversification

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

Pair Corralation between Patrimoine and Groupe Partouche

Assuming the 90 days trading horizon Patrimoine et Commerce is expected to under-perform the Groupe Partouche. But the stock apears to be less risky and, when comparing its historical volatility, Patrimoine et Commerce is 1.25 times less risky than Groupe Partouche. The stock trades about -0.39 of its potential returns per unit of risk. The Groupe Partouche SA is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  4,000  in Groupe Partouche SA on September 15, 2024 and sell it today you would lose (160.00) from holding Groupe Partouche SA or give up 4.0% of portfolio value over 90 days.

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

Patrimoine et Commerce  vs.  Groupe Partouche SA

Patrimoine et Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Patrimoine et Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Patrimoine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Groupe Partouche

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groupe Partouche SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Groupe Partouche is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Patrimoine and Groupe Partouche

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

The idea behind Patrimoine et Commerce and Groupe Partouche 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.