Correlation Between Casino Guichard and Lisi SA

Can any of the company-specific risk be diversified away by investing in both Casino Guichard and Lisi 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 Casino Guichard and Lisi SA 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 Lisi SA, you can compare the effects of market volatilities on Casino Guichard and Lisi 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 Casino Guichard with a short position of Lisi SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casino Guichard and Lisi SA.

Diversification Opportunities for Casino Guichard and Lisi SA

0.88

Correlation Coefficient

Casino Guichard  Lisi SA

Very poor diversification

The 3 months correlation between Casino and Lisi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Casino Guichard Perrachon and Lisi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lisi SA 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 Lisi SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lisi SA has no effect on the direction of Casino Guichard i.e., Casino Guichard and Lisi SA go up and down completely randomly.

Pair Corralation between Casino Guichard and Lisi SA

Assuming the 90 days horizon Casino Guichard Perrachon is expected to generate 27.5 times more return on investment than Lisi SA. However, Casino Guichard is 27.5 times more volatile than Lisi SA. It trades about 0.02 of its potential returns per unit of risk. Lisi SA is currently generating about 0.02 per unit of risk. If you would invest  109,000  in Casino Guichard Perrachon on October 5, 2024 and sell it today you would lose (108,884) from holding Casino Guichard Perrachon or give up 99.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.79%
Values	Daily Returns

Casino Guichard Perrachon  vs.  Lisi SA

Casino Guichard Perrachon

Risk-Adjusted Performance

0 of 100

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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lisi SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lisi SA 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 forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Casino Guichard and Lisi SA

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

The idea behind Casino Guichard Perrachon and Lisi 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.