Correlation Between Grolleau SAS and Broadpeak

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

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

Diversification Opportunities for Grolleau SAS and Broadpeak

-0.28

Correlation Coefficient

Grolleau SAS  Broadpeak

Very good diversification

The 3 months correlation between Grolleau and Broadpeak is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Grolleau SAS and Broadpeak SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadpeak SA and Grolleau SAS 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 Grolleau SAS are associated (or correlated) with Broadpeak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadpeak SA has no effect on the direction of Grolleau SAS i.e., Grolleau SAS and Broadpeak go up and down completely randomly.

Pair Corralation between Grolleau SAS and Broadpeak

Assuming the 90 days trading horizon Grolleau SAS is expected to under-perform the Broadpeak. But the stock apears to be less risky and, when comparing its historical volatility, Grolleau SAS is 1.1 times less risky than Broadpeak. The stock trades about -0.03 of its potential returns per unit of risk. The Broadpeak SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Broadpeak SA on December 1, 2024 and sell it today you would earn a total of  26.00  from holding Broadpeak SA or generate 26.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Grolleau SAS  vs.  Broadpeak SA

Grolleau SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grolleau SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Broadpeak SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadpeak SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Broadpeak reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grolleau SAS and Broadpeak

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

The idea behind Grolleau SAS and Broadpeak 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..