Correlation Between Groupe Guillin and Infotel SA

Can any of the company-specific risk be diversified away by investing in both Groupe Guillin and Infotel 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 Infotel 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 Infotel SA, you can compare the effects of market volatilities on Groupe Guillin and Infotel 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 Infotel SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupe Guillin and Infotel SA.

Diversification Opportunities for Groupe Guillin and Infotel SA

-0.54

Correlation Coefficient

Groupe Guillin  Infotel SA

Excellent diversification

The 3 months correlation between Groupe and Infotel is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Infotel SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infotel 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 Infotel SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infotel SA has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Infotel SA go up and down completely randomly.

Pair Corralation between Groupe Guillin and Infotel SA

Assuming the 90 days trading horizon Groupe Guillin SA is expected to under-perform the Infotel SA. But the stock apears to be less risky and, when comparing its historical volatility, Groupe Guillin SA is 1.32 times less risky than Infotel SA. The stock trades about -0.19 of its potential returns per unit of risk. The Infotel SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,830  in Infotel SA on August 31, 2024 and sell it today you would earn a total of  220.00  from holding Infotel SA or generate 5.74% return on investment over 90 days.

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

Groupe Guillin SA  vs.  Infotel SA

Groupe Guillin SA

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Infotel SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infotel SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Infotel SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groupe Guillin and Infotel SA

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

The idea behind Groupe Guillin SA and Infotel 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.