Correlation Between Malteries Franco and Grard Perrier

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

By analyzing existing cross correlation between Malteries Franco Belges Socit and Grard Perrier Industrie, you can compare the effects of market volatilities on Malteries Franco and Grard Perrier 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 Malteries Franco with a short position of Grard Perrier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malteries Franco and Grard Perrier.

Diversification Opportunities for Malteries Franco and Grard Perrier

0.19

Correlation Coefficient

Malteries Franco  Grard Perrier

Average diversification

The 3 months correlation between Malteries and Grard is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Malteries Franco Belges Socit and Grard Perrier Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grard Perrier Industrie and Malteries Franco 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 Malteries Franco Belges Socit are associated (or correlated) with Grard Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grard Perrier Industrie has no effect on the direction of Malteries Franco i.e., Malteries Franco and Grard Perrier go up and down completely randomly.

Pair Corralation between Malteries Franco and Grard Perrier

Assuming the 90 days trading horizon Malteries Franco Belges Socit is expected to generate 0.87 times more return on investment than Grard Perrier. However, Malteries Franco Belges Socit is 1.15 times less risky than Grard Perrier. It trades about -0.03 of its potential returns per unit of risk. Grard Perrier Industrie is currently generating about -0.03 per unit of risk. If you would invest  73,500  in Malteries Franco Belges Socit on September 5, 2024 and sell it today you would lose (500.00) from holding Malteries Franco Belges Socit or give up 0.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Malteries Franco Belges Socit  vs.  Grard Perrier Industrie

Malteries Franco Belges

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Malteries Franco Belges Socit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malteries Franco sustained solid returns over the last few months and may actually be approaching a breakup point.

Grard Perrier Industrie

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Malteries Franco and Grard Perrier

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

The idea behind Malteries Franco Belges Socit and Grard Perrier Industrie 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.