Correlation Between GRIN and VINCI

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

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

Diversification Opportunities for GRIN and VINCI

0.58

Correlation Coefficient

GRIN  VINCI

Very weak diversification

The 3 months correlation between GRIN and VINCI is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GRIN and VINCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VINCI and GRIN 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 GRIN are associated (or correlated) with VINCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VINCI has no effect on the direction of GRIN i.e., GRIN and VINCI go up and down completely randomly.

Pair Corralation between GRIN and VINCI

Assuming the 90 days trading horizon GRIN is expected to generate 1.2 times less return on investment than VINCI. In addition to that, GRIN is 1.49 times more volatile than VINCI. It trades about 0.14 of its total potential returns per unit of risk. VINCI is currently generating about 0.25 per unit of volatility. If you would invest  719.00  in VINCI on September 1, 2024 and sell it today you would earn a total of  489.00  from holding VINCI or generate 68.01% return on investment over 90 days.

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

GRIN  vs.  VINCI

GRIN

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GRIN are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, GRIN exhibited solid returns over the last few months and may actually be approaching a breakup point.

VINCI

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VINCI are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, VINCI exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRIN and VINCI

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

The idea behind GRIN and VINCI 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.