Correlation Between Berkem Group and Grolleau SAS

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

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

Diversification Opportunities for Berkem Group and Grolleau SAS

-0.14

Correlation Coefficient

Berkem Group  Grolleau SAS

Good diversification

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

Pair Corralation between Berkem Group and Grolleau SAS

Assuming the 90 days trading horizon Berkem Group SA is expected to generate 1.78 times more return on investment than Grolleau SAS. However, Berkem Group is 1.78 times more volatile than Grolleau SAS. It trades about 0.0 of its potential returns per unit of risk. Grolleau SAS is currently generating about -0.02 per unit of risk. If you would invest  561.00  in Berkem Group SA on October 10, 2024 and sell it today you would lose (251.00) from holding Berkem Group SA or give up 44.74% of portfolio value over 90 days.

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

Berkem Group SA  vs.  Grolleau SAS

Berkem Group SA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkem Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Berkem Group is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Grolleau SAS

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, Grolleau SAS is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Berkem Group and Grolleau SAS

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

The idea behind Berkem Group SA and Grolleau SAS 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.