Correlation Between Groupe Pizzorno and Ecoslops

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

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

Diversification Opportunities for Groupe Pizzorno and Ecoslops

0.82

Correlation Coefficient

Groupe Pizzorno  Ecoslops

Very poor diversification

The 3 months correlation between Groupe and Ecoslops is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Pizzorno Environnement and Ecoslops SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoslops SA and Groupe Pizzorno 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 Pizzorno Environnement are associated (or correlated) with Ecoslops. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoslops SA has no effect on the direction of Groupe Pizzorno i.e., Groupe Pizzorno and Ecoslops go up and down completely randomly.

Pair Corralation between Groupe Pizzorno and Ecoslops

Assuming the 90 days trading horizon Groupe Pizzorno Environnement is expected to generate 0.72 times more return on investment than Ecoslops. However, Groupe Pizzorno Environnement is 1.39 times less risky than Ecoslops. It trades about -0.1 of its potential returns per unit of risk. Ecoslops SA is currently generating about -0.15 per unit of risk. If you would invest  7,860  in Groupe Pizzorno Environnement on December 29, 2024 and sell it today you would lose (1,160) from holding Groupe Pizzorno Environnement or give up 14.76% of portfolio value over 90 days.

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

Groupe Pizzorno Environnement  vs.  Ecoslops SA

Groupe Pizzorno Envi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Groupe Pizzorno Environnement 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 technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ecoslops SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecoslops SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Groupe Pizzorno and Ecoslops

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

The idea behind Groupe Pizzorno Environnement and Ecoslops 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.