Correlation Between BGF Latin and Groupama Entreprises

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

By analyzing existing cross correlation between BGF Latin American and Groupama Entreprises N, you can compare the effects of market volatilities on BGF Latin and Groupama Entreprises 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 BGF Latin with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Latin and Groupama Entreprises.

Diversification Opportunities for BGF Latin and Groupama Entreprises

-0.91

Correlation Coefficient

BGF Latin  Groupama Entreprises

Pay attention - limited upside

The 3 months correlation between BGF and Groupama is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding BGF Latin American and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and BGF Latin 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 BGF Latin American are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of BGF Latin i.e., BGF Latin and Groupama Entreprises go up and down completely randomly.

Pair Corralation between BGF Latin and Groupama Entreprises

Assuming the 90 days trading horizon BGF Latin American is expected to under-perform the Groupama Entreprises. In addition to that, BGF Latin is 100.31 times more volatile than Groupama Entreprises N. It trades about -0.08 of its total potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.99 per unit of volatility. If you would invest  55,573  in Groupama Entreprises N on October 10, 2024 and sell it today you would earn a total of  3,919  from holding Groupama Entreprises N or generate 7.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	45.11%
Values	Daily Returns

BGF Latin American  vs.  Groupama Entreprises N

BGF Latin American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BGF Latin American has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Groupama Entreprises

Risk-Adjusted Performance

75 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 75 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BGF Latin and Groupama Entreprises

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

The idea behind BGF Latin American and Groupama Entreprises N 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.