Correlation Between Groupe Pizzorno and Aurea SA

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

Diversification Opportunities for Groupe Pizzorno and Aurea SA

-0.24

Correlation Coefficient

Groupe Pizzorno  Aurea SA

Very good diversification

The 3 months correlation between Groupe and Aurea is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Pizzorno Environnement and Aurea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurea 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 Aurea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurea SA has no effect on the direction of Groupe Pizzorno i.e., Groupe Pizzorno and Aurea SA go up and down completely randomly.

Pair Corralation between Groupe Pizzorno and Aurea SA

Assuming the 90 days trading horizon Groupe Pizzorno Environnement is expected to under-perform the Aurea SA. In addition to that, Groupe Pizzorno is 1.35 times more volatile than Aurea SA. It trades about -0.32 of its total potential returns per unit of risk. Aurea SA is currently generating about 0.01 per unit of volatility. If you would invest  554.00  in Aurea SA on December 6, 2024 and sell it today you would earn a total of  0.00  from holding Aurea SA or generate 0.0% return on investment over 90 days.

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

Groupe Pizzorno Environnement  vs.  Aurea 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.

Aurea SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aurea SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aurea SA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Groupe Pizzorno and Aurea SA

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

The idea behind Groupe Pizzorno Environnement and Aurea 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.