Correlation Between Maisons Du and Verallia

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

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

Diversification Opportunities for Maisons Du and Verallia

-0.56

Correlation Coefficient

Maisons Du  Verallia

Excellent diversification

The 3 months correlation between Maisons and Verallia is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Maisons du Monde and Verallia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verallia and Maisons Du 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 Maisons du Monde are associated (or correlated) with Verallia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verallia has no effect on the direction of Maisons Du i.e., Maisons Du and Verallia go up and down completely randomly.

Pair Corralation between Maisons Du and Verallia

Assuming the 90 days trading horizon Maisons du Monde is expected to under-perform the Verallia. But the stock apears to be less risky and, when comparing its historical volatility, Maisons du Monde is 1.03 times less risky than Verallia. The stock trades about -0.24 of its potential returns per unit of risk. The Verallia is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,362  in Verallia on December 29, 2024 and sell it today you would earn a total of  532.00  from holding Verallia or generate 22.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Maisons du Monde  vs.  Verallia

Maisons du Monde

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maisons du Monde 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 primary 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.

Verallia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Verallia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Verallia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maisons Du and Verallia

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

The idea behind Maisons du Monde and Verallia 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.