Correlation Between CREDIT IMMOBILIER and TGCC SA

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

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

Diversification Opportunities for CREDIT IMMOBILIER and TGCC SA

0.23

Correlation Coefficient

CREDIT IMMOBILIER  TGCC SA

Modest diversification

The 3 months correlation between CREDIT and TGCC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CREDIT IMMOBILIER ET and TGCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGCC SA and CREDIT IMMOBILIER 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 CREDIT IMMOBILIER ET are associated (or correlated) with TGCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGCC SA has no effect on the direction of CREDIT IMMOBILIER i.e., CREDIT IMMOBILIER and TGCC SA go up and down completely randomly.

Pair Corralation between CREDIT IMMOBILIER and TGCC SA

Assuming the 90 days trading horizon CREDIT IMMOBILIER is expected to generate 9.33 times less return on investment than TGCC SA. But when comparing it to its historical volatility, CREDIT IMMOBILIER ET is 1.46 times less risky than TGCC SA. It trades about 0.04 of its potential returns per unit of risk. TGCC SA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  47,100  in TGCC SA on December 29, 2024 and sell it today you would earn a total of  22,900  from holding TGCC SA or generate 48.62% return on investment over 90 days.

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

CREDIT IMMOBILIER ET  vs.  TGCC SA

CREDIT IMMOBILIER

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CREDIT IMMOBILIER ET are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, CREDIT IMMOBILIER is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

TGCC SA

Risk-Adjusted Performance

Solid

Over the last 90 days TGCC SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak fundamental indicators, TGCC SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CREDIT IMMOBILIER and TGCC SA

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

The idea behind CREDIT IMMOBILIER ET and TGCC 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..