Correlation Between Groupama Entreprises and Fineco AM

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

By analyzing existing cross correlation between Groupama Entreprises N and Fineco AM Pasv, you can compare the effects of market volatilities on Groupama Entreprises and Fineco AM 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 Groupama Entreprises with a short position of Fineco AM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupama Entreprises and Fineco AM.

Diversification Opportunities for Groupama Entreprises and Fineco AM

-0.56

Correlation Coefficient

Groupama Entreprises  Fineco AM

Excellent diversification

The 3 months correlation between Groupama and Fineco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Groupama Entreprises N and Fineco AM Pasv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fineco AM Pasv and Groupama Entreprises 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 Groupama Entreprises N are associated (or correlated) with Fineco AM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fineco AM Pasv has no effect on the direction of Groupama Entreprises i.e., Groupama Entreprises and Fineco AM go up and down completely randomly.

Pair Corralation between Groupama Entreprises and Fineco AM

Assuming the 90 days trading horizon Groupama Entreprises N is expected to generate 0.02 times more return on investment than Fineco AM. However, Groupama Entreprises N is 60.72 times less risky than Fineco AM. It trades about 1.01 of its potential returns per unit of risk. Fineco AM Pasv is currently generating about -0.09 per unit of risk. If you would invest  59,452  in Groupama Entreprises N on December 28, 2024 and sell it today you would earn a total of  380.00  from holding Groupama Entreprises N or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Groupama Entreprises N  vs.  Fineco AM Pasv

Groupama Entreprises

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 79 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fineco AM Pasv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fineco AM Pasv has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Fineco AM is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Groupama Entreprises and Fineco AM

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

The idea behind Groupama Entreprises N and Fineco AM Pasv 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.