Correlation Between Gecina SA and Groupe Partouche

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

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

Diversification Opportunities for Gecina SA and Groupe Partouche

0.89

Correlation Coefficient

Gecina SA  Groupe Partouche

Very poor diversification

The 3 months correlation between Gecina and Groupe is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Gecina SA and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Gecina SA 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 Gecina SA are associated (or correlated) with Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Gecina SA i.e., Gecina SA and Groupe Partouche go up and down completely randomly.

Pair Corralation between Gecina SA and Groupe Partouche

Assuming the 90 days trading horizon Gecina SA is expected to under-perform the Groupe Partouche. In addition to that, Gecina SA is 1.16 times more volatile than Groupe Partouche SA. It trades about -0.2 of its total potential returns per unit of risk. Groupe Partouche SA is currently generating about 0.08 per unit of volatility. If you would invest  3,830  in Groupe Partouche SA on October 7, 2024 and sell it today you would earn a total of  50.00  from holding Groupe Partouche SA or generate 1.31% return on investment over 90 days.

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

Gecina SA  vs.  Groupe Partouche SA

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gecina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Groupe Partouche

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groupe Partouche SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Gecina SA and Groupe Partouche

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

The idea behind Gecina SA and Groupe Partouche 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.