Correlation Between Groupe Pizzorno and Boiron SA

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

Diversification Opportunities for Groupe Pizzorno and Boiron SA

0.75

Correlation Coefficient

Groupe Pizzorno  Boiron SA

Poor diversification

The 3 months correlation between Groupe and Boiron is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Pizzorno Environnement and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of Groupe Pizzorno i.e., Groupe Pizzorno and Boiron SA go up and down completely randomly.

Pair Corralation between Groupe Pizzorno and Boiron SA

Assuming the 90 days trading horizon Groupe Pizzorno Environnement is expected to under-perform the Boiron SA. In addition to that, Groupe Pizzorno is 1.17 times more volatile than Boiron SA. It trades about -0.1 of its total potential returns per unit of risk. Boiron SA is currently generating about -0.05 per unit of volatility. If you would invest  2,670  in Boiron SA on December 30, 2024 and sell it today you would lose (180.00) from holding Boiron SA or give up 6.74% of portfolio value over 90 days.

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

Groupe Pizzorno Environnement  vs.  Boiron 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.

Boiron SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boiron SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Boiron SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groupe Pizzorno and Boiron SA

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

The idea behind Groupe Pizzorno Environnement and Boiron 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.

Check out your portfolio center.

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.