Correlation Between Thermador Groupe and Groupe Partouche

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

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

Diversification Opportunities for Thermador Groupe and Groupe Partouche

-0.36

Correlation Coefficient

Thermador Groupe  Groupe Partouche

Very good diversification

The 3 months correlation between Thermador and Groupe is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Thermador Groupe 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 Thermador Groupe SA 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 Thermador Groupe i.e., Thermador Groupe and Groupe Partouche go up and down completely randomly.

Pair Corralation between Thermador Groupe and Groupe Partouche

Assuming the 90 days trading horizon Thermador Groupe SA is expected to under-perform the Groupe Partouche. But the stock apears to be less risky and, when comparing its historical volatility, Thermador Groupe SA is 1.3 times less risky than Groupe Partouche. The stock trades about -0.07 of its potential returns per unit of risk. The Groupe Partouche SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,890  in Groupe Partouche SA on September 12, 2024 and sell it today you would earn a total of  210.00  from holding Groupe Partouche SA or generate 11.11% return on investment over 90 days.

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

Thermador Groupe SA  vs.  Groupe Partouche SA

Thermador Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermador Groupe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Groupe Partouche

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Partouche SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe Partouche may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Thermador Groupe and Groupe Partouche

The main advantage of trading using opposite Thermador Groupe and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermador Groupe 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 Thermador Groupe SA 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.