Correlation Between Guerbet S and Laurent Perrier

Can any of the company-specific risk be diversified away by investing in both Guerbet S and Laurent Perrier 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 Laurent Perrier 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 Laurent Perrier, you can compare the effects of market volatilities on Guerbet S and Laurent Perrier 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 Laurent Perrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guerbet S and Laurent Perrier.

Diversification Opportunities for Guerbet S and Laurent Perrier

0.34

Correlation Coefficient

Guerbet S  Laurent Perrier

Weak diversification

The 3 months correlation between Guerbet and Laurent is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guerbet S A and Laurent Perrier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurent Perrier 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 Laurent Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurent Perrier has no effect on the direction of Guerbet S i.e., Guerbet S and Laurent Perrier go up and down completely randomly.

Pair Corralation between Guerbet S and Laurent Perrier

Assuming the 90 days trading horizon Guerbet S A is expected to under-perform the Laurent Perrier. In addition to that, Guerbet S is 2.0 times more volatile than Laurent Perrier. It trades about -0.2 of its total potential returns per unit of risk. Laurent Perrier is currently generating about -0.03 per unit of volatility. If you would invest  11,100  in Laurent Perrier on September 15, 2024 and sell it today you would lose (350.00) from holding Laurent Perrier or give up 3.15% 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.  Laurent Perrier

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.

Laurent Perrier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Laurent Perrier has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Laurent Perrier is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guerbet S and Laurent Perrier

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

The idea behind Guerbet S A and Laurent Perrier 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.

Check out your portfolio center.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.