Correlation Between Groupe CRIT and Synergie

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

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

Diversification Opportunities for Groupe CRIT and Synergie

-0.22

Correlation Coefficient

Groupe CRIT  Synergie

Very good diversification

The 3 months correlation between Groupe and Synergie is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Groupe CRIT SA and Synergie SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergie SE and Groupe CRIT 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 Groupe CRIT SA are associated (or correlated) with Synergie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergie SE has no effect on the direction of Groupe CRIT i.e., Groupe CRIT and Synergie go up and down completely randomly.

Pair Corralation between Groupe CRIT and Synergie

Assuming the 90 days trading horizon Groupe CRIT SA is expected to under-perform the Synergie. But the stock apears to be less risky and, when comparing its historical volatility, Groupe CRIT SA is 1.24 times less risky than Synergie. The stock trades about -0.08 of its potential returns per unit of risk. The Synergie SE is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,840  in Synergie SE on November 29, 2024 and sell it today you would earn a total of  110.00  from holding Synergie SE or generate 3.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Groupe CRIT SA  vs.  Synergie SE

Groupe CRIT SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Groupe CRIT 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.

Synergie SE

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Synergie SE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Synergie is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groupe CRIT and Synergie

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

The idea behind Groupe CRIT SA and Synergie SE 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.