Correlation Between IE00B0H4TS55 and Groupama Entreprises

Can any of the company-specific risk be diversified away by investing in both IE00B0H4TS55 and Groupama Entreprises 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 IE00B0H4TS55 and Groupama Entreprises into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IE00B0H4TS55 and Groupama Entreprises N, you can compare the effects of market volatilities on IE00B0H4TS55 and Groupama Entreprises 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 IE00B0H4TS55 with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of IE00B0H4TS55 and Groupama Entreprises.

Diversification Opportunities for IE00B0H4TS55 and Groupama Entreprises

-0.58

Correlation Coefficient

IE00B0H4TS55  Groupama Entreprises

Excellent diversification

The 3 months correlation between IE00B0H4TS55 and Groupama is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding IE00B0H4TS55 and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and IE00B0H4TS55 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 IE00B0H4TS55 are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of IE00B0H4TS55 i.e., IE00B0H4TS55 and Groupama Entreprises go up and down completely randomly.

Pair Corralation between IE00B0H4TS55 and Groupama Entreprises

Assuming the 90 days trading horizon IE00B0H4TS55 is expected to generate 15.74 times more return on investment than Groupama Entreprises. However, IE00B0H4TS55 is 15.74 times more volatile than Groupama Entreprises N. It trades about 0.07 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.98 per unit of risk. If you would invest  18,158  in IE00B0H4TS55 on October 2, 2024 and sell it today you would earn a total of  324.00  from holding IE00B0H4TS55 or generate 1.78% return on investment over 90 days.

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

IE00B0H4TS55  vs.  Groupama Entreprises N

IE00B0H4TS55

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IE00B0H4TS55 has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, IE00B0H4TS55 is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Groupama Entreprises

Risk-Adjusted Performance

76 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 76 (%) 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.

Pair Trading with IE00B0H4TS55 and Groupama Entreprises

The main advantage of trading using opposite IE00B0H4TS55 and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IE00B0H4TS55 position performs unexpectedly, Groupama Entreprises 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 Groupama Entreprises will offset losses from the drop in Groupama Entreprises' long position.

The idea behind IE00B0H4TS55 and Groupama Entreprises N 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.