Correlation Between Gecina SA and HomeToGo

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

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

Diversification Opportunities for Gecina SA and HomeToGo

-0.15

Correlation Coefficient

Gecina SA  HomeToGo

Good diversification

The 3 months correlation between Gecina and HomeToGo is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gecina SA and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Gecina SA i.e., Gecina SA and HomeToGo go up and down completely randomly.

Pair Corralation between Gecina SA and HomeToGo

Assuming the 90 days trading horizon Gecina SA is expected to under-perform the HomeToGo. But the stock apears to be less risky and, when comparing its historical volatility, Gecina SA is 2.76 times less risky than HomeToGo. The stock trades about -0.19 of its potential returns per unit of risk. The HomeToGo SE is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  196.00  in HomeToGo SE on October 4, 2024 and sell it today you would lose (1.00) from holding HomeToGo SE or give up 0.51% of portfolio value over 90 days.

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

Gecina SA  vs.  HomeToGo SE

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HomeToGo SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HomeToGo SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, HomeToGo is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gecina SA and HomeToGo

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

The idea behind Gecina SA and HomeToGo SE 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.