Correlation Between Guerbet S and Damartex

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

By analyzing existing cross correlation between Guerbet S A and Damartex, you can compare the effects of market volatilities on Guerbet S and Damartex 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 Guerbet S with a short position of Damartex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Damartex.

Diversification Opportunities for Guerbet S and Damartex

0.39

Correlation Coefficient

Guerbet S  Damartex

Weak diversification

The 3 months correlation between Guerbet and Damartex is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Damartex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damartex and Guerbet S 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 Guerbet S A are associated (or correlated) with Damartex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damartex has no effect on the direction of Guerbet S i.e., Guerbet S and Damartex go up and down completely randomly.

Pair Corralation between Guerbet S and Damartex

Assuming the 90 days trading horizon Guerbet S A is expected to under-perform the Damartex. In addition to that, Guerbet S is 1.1 times more volatile than Damartex. It trades about -0.18 of its total potential returns per unit of risk. Damartex is currently generating about -0.04 per unit of volatility. If you would invest  538.00  in Damartex on September 29, 2024 and sell it today you would lose (39.00) from holding Damartex or give up 7.25% of portfolio value over 90 days.

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

Guerbet S A  vs.  Damartex

Guerbet S A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guerbet S A 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Damartex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Damartex has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Damartex is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Guerbet S and Damartex

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

The idea behind Guerbet S A and Damartex 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.