Correlation Between Piscines Desjoyaux and Tonnellerie Francois

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

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

Diversification Opportunities for Piscines Desjoyaux and Tonnellerie Francois

-0.56

Correlation Coefficient

Piscines Desjoyaux  Tonnellerie Francois

Excellent diversification

The 3 months correlation between Piscines and Tonnellerie is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Piscines Desjoyaux SA and Tonnellerie Francois Freres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonnellerie Francois and Piscines Desjoyaux 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 Piscines Desjoyaux SA are associated (or correlated) with Tonnellerie Francois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonnellerie Francois has no effect on the direction of Piscines Desjoyaux i.e., Piscines Desjoyaux and Tonnellerie Francois go up and down completely randomly.

Pair Corralation between Piscines Desjoyaux and Tonnellerie Francois

Assuming the 90 days trading horizon Piscines Desjoyaux SA is expected to generate 0.7 times more return on investment than Tonnellerie Francois. However, Piscines Desjoyaux SA is 1.42 times less risky than Tonnellerie Francois. It trades about 0.11 of its potential returns per unit of risk. Tonnellerie Francois Freres is currently generating about -0.09 per unit of risk. If you would invest  1,230  in Piscines Desjoyaux SA on December 30, 2024 and sell it today you would earn a total of  150.00  from holding Piscines Desjoyaux SA or generate 12.2% return on investment over 90 days.

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

Piscines Desjoyaux SA  vs.  Tonnellerie Francois Freres

Piscines Desjoyaux

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Piscines Desjoyaux SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Piscines Desjoyaux may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tonnellerie Francois

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tonnellerie Francois Freres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Piscines Desjoyaux and Tonnellerie Francois

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

The idea behind Piscines Desjoyaux SA and Tonnellerie Francois Freres 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.