Correlation Between Gevelot and Graines Voltz

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

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

Diversification Opportunities for Gevelot and Graines Voltz

0.14

Correlation Coefficient

Gevelot  Graines Voltz

Average diversification

The 3 months correlation between Gevelot and Graines is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gevelot and Graines Voltz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graines Voltz SA and Gevelot 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 Gevelot are associated (or correlated) with Graines Voltz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graines Voltz SA has no effect on the direction of Gevelot i.e., Gevelot and Graines Voltz go up and down completely randomly.

Pair Corralation between Gevelot and Graines Voltz

Assuming the 90 days trading horizon Gevelot is expected to generate 0.63 times more return on investment than Graines Voltz. However, Gevelot is 1.59 times less risky than Graines Voltz. It trades about -0.02 of its potential returns per unit of risk. Graines Voltz SA is currently generating about -0.02 per unit of risk. If you would invest  19,000  in Gevelot on December 29, 2024 and sell it today you would lose (500.00) from holding Gevelot or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Gevelot  vs.  Graines Voltz SA

Gevelot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gevelot has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gevelot is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Graines Voltz SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gevelot and Graines Voltz

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

The idea behind Gevelot and Graines Voltz 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.