Correlation Between Moulinvest and Piscines Desjoyaux

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

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

Diversification Opportunities for Moulinvest and Piscines Desjoyaux

0.77

Correlation Coefficient

Moulinvest  Piscines Desjoyaux

Poor diversification

The 3 months correlation between Moulinvest and Piscines is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Moulinvest and Piscines Desjoyaux SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piscines Desjoyaux 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 Piscines Desjoyaux. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piscines Desjoyaux has no effect on the direction of Moulinvest i.e., Moulinvest and Piscines Desjoyaux go up and down completely randomly.

Pair Corralation between Moulinvest and Piscines Desjoyaux

Assuming the 90 days trading horizon Moulinvest is expected to generate 1.7 times more return on investment than Piscines Desjoyaux. However, Moulinvest is 1.7 times more volatile than Piscines Desjoyaux SA. It trades about 0.24 of its potential returns per unit of risk. Piscines Desjoyaux SA is currently generating about 0.28 per unit of risk. If you would invest  1,098  in Moulinvest on December 5, 2024 and sell it today you would earn a total of  462.00  from holding Moulinvest or generate 42.08% return on investment over 90 days.

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

Moulinvest  vs.  Piscines Desjoyaux SA

Moulinvest

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moulinvest are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Moulinvest reported solid returns over the last few months and may actually be approaching a breakup point.

Piscines Desjoyaux

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Piscines Desjoyaux SA are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Piscines Desjoyaux reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moulinvest and Piscines Desjoyaux

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

The idea behind Moulinvest and Piscines Desjoyaux 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.