Correlation Between ID Logistics and Graines Voltz

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

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

Diversification Opportunities for ID Logistics and Graines Voltz

-0.1

Correlation Coefficient

ID Logistics  Graines Voltz

Good diversification

The 3 months correlation between IDL and Graines is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ID Logistics Group and Graines Voltz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graines Voltz SA and ID Logistics 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 ID Logistics Group are associated (or correlated) with Graines Voltz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graines Voltz SA has no effect on the direction of ID Logistics i.e., ID Logistics and Graines Voltz go up and down completely randomly.

Pair Corralation between ID Logistics and Graines Voltz

Assuming the 90 days trading horizon ID Logistics Group is expected to generate 0.78 times more return on investment than Graines Voltz. However, ID Logistics Group is 1.28 times less risky than Graines Voltz. It trades about -0.03 of its potential returns per unit of risk. Graines Voltz SA is currently generating about -0.04 per unit of risk. If you would invest  40,300  in ID Logistics Group on September 3, 2024 and sell it today you would lose (1,500) from holding ID Logistics Group or give up 3.72% of portfolio value over 90 days.

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

ID Logistics Group  vs.  Graines Voltz SA

ID Logistics Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Graines Voltz SA

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with ID Logistics and Graines Voltz

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

The idea behind ID Logistics Group and Graines Voltz 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..