Correlation Between Graines Voltz and IDI SCA

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

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

Diversification Opportunities for Graines Voltz and IDI SCA

-0.45

Correlation Coefficient

Graines Voltz  IDI SCA

Very good diversification

The 3 months correlation between Graines and IDI is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Graines Voltz SA and IDI SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDI SCA and Graines Voltz 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 Graines Voltz SA are associated (or correlated) with IDI SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDI SCA has no effect on the direction of Graines Voltz i.e., Graines Voltz and IDI SCA go up and down completely randomly.

Pair Corralation between Graines Voltz and IDI SCA

Assuming the 90 days trading horizon Graines Voltz is expected to generate 32.0 times less return on investment than IDI SCA. In addition to that, Graines Voltz is 4.25 times more volatile than IDI SCA. It trades about 0.0 of its total potential returns per unit of risk. IDI SCA is currently generating about 0.21 per unit of volatility. If you would invest  6,700  in IDI SCA on December 1, 2024 and sell it today you would earn a total of  740.00  from holding IDI SCA or generate 11.04% return on investment over 90 days.

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

Graines Voltz SA  vs.  IDI SCA

Graines Voltz SA

Risk-Adjusted Performance

Very Weak

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

IDI SCA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IDI SCA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, IDI SCA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Graines Voltz and IDI SCA

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

The idea behind Graines Voltz SA and IDI SCA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.