Correlation Between Azvalor Global and Groupama Entreprises

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

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

Diversification Opportunities for Azvalor Global and Groupama Entreprises

-0.35

Correlation Coefficient

Azvalor Global  Groupama Entreprises

Very good diversification

The 3 months correlation between Azvalor and Groupama is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Azvalor Global Value and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Azvalor Global 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 Azvalor Global Value 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 Azvalor Global i.e., Azvalor Global and Groupama Entreprises go up and down completely randomly.

Pair Corralation between Azvalor Global and Groupama Entreprises

Assuming the 90 days trading horizon Azvalor Global Value is expected to under-perform the Groupama Entreprises. In addition to that, Azvalor Global is 66.83 times more volatile than Groupama Entreprises N. It trades about -0.29 of its total potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.88 per unit of volatility. If you would invest  59,316  in Groupama Entreprises N on October 1, 2024 and sell it today you would earn a total of  104.00  from holding Groupama Entreprises N or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Azvalor Global Value  vs.  Groupama Entreprises N

Azvalor Global Value

Risk-Adjusted Performance

0 of 100

Very Weak

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

Groupama Entreprises

Risk-Adjusted Performance

77 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 77 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Azvalor Global and Groupama Entreprises

The main advantage of trading using opposite Azvalor Global and Groupama Entreprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azvalor Global 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 Azvalor Global Value 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.