Correlation Between Moulinvest and Gascogne

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

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

Diversification Opportunities for Moulinvest and Gascogne

0.69

Correlation Coefficient

Moulinvest  Gascogne

Poor diversification

The 3 months correlation between Moulinvest and Gascogne is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Moulinvest and Gascogne SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gascogne SA and Moulinvest 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 Moulinvest are associated (or correlated) with Gascogne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gascogne SA has no effect on the direction of Moulinvest i.e., Moulinvest and Gascogne go up and down completely randomly.

Pair Corralation between Moulinvest and Gascogne

Assuming the 90 days trading horizon Moulinvest is expected to under-perform the Gascogne. In addition to that, Moulinvest is 1.35 times more volatile than Gascogne SA. It trades about -0.02 of its total potential returns per unit of risk. Gascogne SA is currently generating about 0.0 per unit of volatility. If you would invest  252.00  in Gascogne SA on September 17, 2024 and sell it today you would lose (1.00) from holding Gascogne SA or give up 0.4% of portfolio value over 90 days.

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

Moulinvest  vs.  Gascogne SA

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gascogne SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gascogne SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gascogne is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Moulinvest and Gascogne

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

The idea behind Moulinvest and Gascogne 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.