Correlation Between Groupe Guillin and Esker SA

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

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

Diversification Opportunities for Groupe Guillin and Esker SA

-0.48

Correlation Coefficient

Groupe Guillin  Esker SA

Very good diversification

The 3 months correlation between Groupe and Esker is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Esker SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esker SA and Groupe Guillin 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 Groupe Guillin SA are associated (or correlated) with Esker SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esker SA has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Esker SA go up and down completely randomly.

Pair Corralation between Groupe Guillin and Esker SA

Assuming the 90 days trading horizon Groupe Guillin SA is expected to under-perform the Esker SA. In addition to that, Groupe Guillin is 1.72 times more volatile than Esker SA. It trades about -0.04 of its total potential returns per unit of risk. Esker SA is currently generating about 0.17 per unit of volatility. If you would invest  26,100  in Esker SA on December 30, 2024 and sell it today you would earn a total of  1,640  from holding Esker SA or generate 6.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	69.23%
Values	Daily Returns

Groupe Guillin SA  vs.  Esker SA

Groupe Guillin SA

Risk-Adjusted Performance

Very Weak

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

Esker SA

Risk-Adjusted Performance

Good

Over the last 90 days Esker SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively weak basic indicators, Esker SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Groupe Guillin and Esker SA

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

The idea behind Groupe Guillin SA and Esker 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.