Correlation Between Carrefour and Rallye SA

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

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

Diversification Opportunities for Carrefour and Rallye SA

0.0

Correlation Coefficient

Carrefour  Rallye SA

Pay attention - limited upside

The 3 months correlation between Carrefour and Rallye is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA and Rallye SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rallye SA 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 Rallye SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rallye SA has no effect on the direction of Carrefour i.e., Carrefour and Rallye SA go up and down completely randomly.

Pair Corralation between Carrefour and Rallye SA

If you would invest  1,339  in Carrefour SA on October 24, 2024 and sell it today you would earn a total of  8.00  from holding Carrefour SA or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carrefour SA  vs.  Rallye SA

Carrefour SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Rallye SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Carrefour and Rallye SA

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

The idea behind Carrefour SA and Rallye 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.