Correlation Between Groupimo and Valbiotis SAS
Can any of the company-specific risk be diversified away by investing in both Groupimo and Valbiotis SAS 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 Groupimo and Valbiotis SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groupimo SA and Valbiotis SAS, you can compare the effects of market volatilities on Groupimo and Valbiotis SAS 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 Groupimo with a short position of Valbiotis SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groupimo and Valbiotis SAS.
Diversification Opportunities for Groupimo and Valbiotis SAS
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Groupimo and Valbiotis is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Groupimo SA and Valbiotis SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valbiotis SAS and Groupimo 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 Groupimo SA are associated (or correlated) with Valbiotis SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valbiotis SAS has no effect on the direction of Groupimo i.e., Groupimo and Valbiotis SAS go up and down completely randomly.
Pair Corralation between Groupimo and Valbiotis SAS
Assuming the 90 days trading horizon Groupimo SA is expected to generate 3.44 times more return on investment than Valbiotis SAS. However, Groupimo is 3.44 times more volatile than Valbiotis SAS. It trades about 0.06 of its potential returns per unit of risk. Valbiotis SAS is currently generating about 0.04 per unit of risk. If you would invest 20.00 in Groupimo SA on September 26, 2024 and sell it today you would lose (1.00) from holding Groupimo SA or give up 5.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Groupimo SA vs. Valbiotis SAS
Performance |
Timeline |
Groupimo SA |
Valbiotis SAS |
Groupimo and Valbiotis SAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Groupimo and Valbiotis SAS
The main advantage of trading using opposite Groupimo and Valbiotis SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupimo position performs unexpectedly, Valbiotis SAS 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 Valbiotis SAS will offset losses from the drop in Valbiotis SAS's long position.Groupimo vs. TotalEnergies SE | Groupimo vs. LVMH Mot Hennessy | Groupimo vs. Christian Dior SE | Groupimo vs. BNP Paribas SA |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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