Correlation Between Groupe JAJ and Body One

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

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

Diversification Opportunities for Groupe JAJ and Body One

0.4

Correlation Coefficient

Groupe JAJ  Body One

Very weak diversification

The 3 months correlation between Groupe and Body is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Groupe JAJ and Body One SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Body One SA and Groupe JAJ 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 Groupe JAJ are associated (or correlated) with Body One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Body One SA has no effect on the direction of Groupe JAJ i.e., Groupe JAJ and Body One go up and down completely randomly.

Pair Corralation between Groupe JAJ and Body One

Assuming the 90 days trading horizon Groupe JAJ is expected to generate 2.32 times more return on investment than Body One. However, Groupe JAJ is 2.32 times more volatile than Body One SA. It trades about 0.15 of its potential returns per unit of risk. Body One SA is currently generating about 0.12 per unit of risk. If you would invest  98.00  in Groupe JAJ on December 29, 2024 and sell it today you would earn a total of  26.00  from holding Groupe JAJ or generate 26.53% return on investment over 90 days.

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

Groupe JAJ  vs.  Body One SA

Groupe JAJ

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe JAJ are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe JAJ sustained solid returns over the last few months and may actually be approaching a breakup point.

Body One SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Body One SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Body One may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Groupe JAJ and Body One

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

The idea behind Groupe JAJ and Body One 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.