Correlation Between Casino Guichard and Cnova NV

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

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

Diversification Opportunities for Casino Guichard and Cnova NV

0.4

Correlation Coefficient

Casino Guichard  Cnova NV

Very weak diversification

The 3 months correlation between Casino and Cnova is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Casino Guichard Perrachon and Cnova NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cnova NV and Casino Guichard 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 Casino Guichard Perrachon are associated (or correlated) with Cnova NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cnova NV has no effect on the direction of Casino Guichard i.e., Casino Guichard and Cnova NV go up and down completely randomly.

Pair Corralation between Casino Guichard and Cnova NV

Assuming the 90 days horizon Casino Guichard Perrachon is expected to under-perform the Cnova NV. But the stock apears to be less risky and, when comparing its historical volatility, Casino Guichard Perrachon is 1.94 times less risky than Cnova NV. The stock trades about -0.18 of its potential returns per unit of risk. The Cnova NV is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Cnova NV on December 21, 2024 and sell it today you would lose (5.00) from holding Cnova NV or give up 29.41% of portfolio value over 90 days.

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

Casino Guichard Perrachon  vs.  Cnova NV

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.

Cnova NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cnova NV 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 Casino Guichard and Cnova NV

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

The idea behind Casino Guichard Perrachon and Cnova NV 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.