Correlation Between Paulic Meunerie and Prodways Group

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

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

Diversification Opportunities for Paulic Meunerie and Prodways Group

0.82

Correlation Coefficient

Paulic Meunerie  Prodways Group

Very poor diversification

The 3 months correlation between Paulic and Prodways is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Paulic Meunerie Sa and Prodways Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodways Group SA and Paulic Meunerie 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 Paulic Meunerie Sa are associated (or correlated) with Prodways Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodways Group SA has no effect on the direction of Paulic Meunerie i.e., Paulic Meunerie and Prodways Group go up and down completely randomly.

Pair Corralation between Paulic Meunerie and Prodways Group

Assuming the 90 days trading horizon Paulic Meunerie Sa is expected to under-perform the Prodways Group. But the stock apears to be less risky and, when comparing its historical volatility, Paulic Meunerie Sa is 1.31 times less risky than Prodways Group. The stock trades about -0.29 of its potential returns per unit of risk. The Prodways Group SA is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  58.00  in Prodways Group SA on September 15, 2024 and sell it today you would lose (6.00) from holding Prodways Group SA or give up 10.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.48%
Values	Daily Returns

Paulic Meunerie Sa  vs.  Prodways Group SA

Paulic Meunerie Sa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paulic Meunerie Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Prodways Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodways Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Paulic Meunerie and Prodways Group

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

The idea behind Paulic Meunerie Sa and Prodways Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.