Correlation Between JC Decaux and Ramsay Generale

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

By analyzing existing cross correlation between JC Decaux SA and Ramsay Generale De, you can compare the effects of market volatilities on JC Decaux and Ramsay Generale 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 JC Decaux with a short position of Ramsay Generale. Check out your portfolio center. Please also check ongoing floating volatility patterns of JC Decaux and Ramsay Generale.

Diversification Opportunities for JC Decaux and Ramsay Generale

-0.49

Correlation Coefficient

JC Decaux  Ramsay Generale

Very good diversification

The 3 months correlation between DEC and Ramsay is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding JC Decaux SA and Ramsay Generale De in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Generale De and JC Decaux 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 JC Decaux SA are associated (or correlated) with Ramsay Generale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Generale De has no effect on the direction of JC Decaux i.e., JC Decaux and Ramsay Generale go up and down completely randomly.

Pair Corralation between JC Decaux and Ramsay Generale

Assuming the 90 days trading horizon JC Decaux SA is expected to generate 0.75 times more return on investment than Ramsay Generale. However, JC Decaux SA is 1.34 times less risky than Ramsay Generale. It trades about 0.1 of its potential returns per unit of risk. Ramsay Generale De is currently generating about -0.18 per unit of risk. If you would invest  1,417  in JC Decaux SA on November 28, 2024 and sell it today you would earn a total of  116.00  from holding JC Decaux SA or generate 8.19% return on investment over 90 days.

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

JC Decaux SA  vs.  Ramsay Generale De

JC Decaux SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JC Decaux SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, JC Decaux may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Ramsay Generale De

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ramsay Generale De 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 March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with JC Decaux and Ramsay Generale

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

The idea behind JC Decaux SA and Ramsay Generale De 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.