Correlation Between Bastide Le and Groupe CRIT

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

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

Diversification Opportunities for Bastide Le and Groupe CRIT

0.27

Correlation Coefficient

Bastide Le  Groupe CRIT

Modest diversification

The 3 months correlation between Bastide and Groupe is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bastide Le Confort and Groupe CRIT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe CRIT SA and Bastide Le 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 Bastide Le Confort are associated (or correlated) with Groupe CRIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe CRIT SA has no effect on the direction of Bastide Le i.e., Bastide Le and Groupe CRIT go up and down completely randomly.

Pair Corralation between Bastide Le and Groupe CRIT

Assuming the 90 days trading horizon Bastide Le Confort is expected to generate 0.99 times more return on investment than Groupe CRIT. However, Bastide Le Confort is 1.01 times less risky than Groupe CRIT. It trades about 0.09 of its potential returns per unit of risk. Groupe CRIT SA is currently generating about 0.09 per unit of risk. If you would invest  2,435  in Bastide Le Confort on December 30, 2024 and sell it today you would earn a total of  305.00  from holding Bastide Le Confort or generate 12.53% return on investment over 90 days.

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

Bastide Le Confort  vs.  Groupe CRIT SA

Bastide Le Confort

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bastide Le Confort are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Bastide Le sustained solid returns over the last few months and may actually be approaching a breakup point.

Groupe CRIT SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe CRIT SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe CRIT sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bastide Le and Groupe CRIT

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

The idea behind Bastide Le Confort and Groupe CRIT 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.