Correlation Between Carrefour and Casino Guichard

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

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

Diversification Opportunities for Carrefour and Casino Guichard

0.67

Correlation Coefficient

Carrefour  Casino Guichard

Poor diversification

The 3 months correlation between Carrefour and Casino is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Casino Guichard Perrachon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casino Guichard Perrachon and Carrefour 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 Carrefour SA are associated (or correlated) with Casino Guichard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casino Guichard Perrachon has no effect on the direction of Carrefour i.e., Carrefour and Casino Guichard go up and down completely randomly.

Pair Corralation between Carrefour and Casino Guichard

Assuming the 90 days horizon Carrefour SA is expected to generate 0.44 times more return on investment than Casino Guichard. However, Carrefour SA is 2.26 times less risky than Casino Guichard. It trades about -0.03 of its potential returns per unit of risk. Casino Guichard Perrachon is currently generating about -0.19 per unit of risk. If you would invest  1,363  in Carrefour SA on December 27, 2024 and sell it today you would lose (52.00) from holding Carrefour SA or give up 3.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Carrefour SA  vs.  Casino Guichard Perrachon

Carrefour SA

Risk-Adjusted Performance

Very Weak

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

Casino Guichard Perrachon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Casino Guichard Perrachon 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 basic 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 Carrefour and Casino Guichard

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

The idea behind Carrefour SA and Casino Guichard Perrachon 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.