Correlation Between Compagnie and Groupe Partouche

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

By analyzing existing cross correlation between Compagnie Du Mont Blanc and Groupe Partouche SA, you can compare the effects of market volatilities on Compagnie and Groupe Partouche 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 Compagnie with a short position of Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie and Groupe Partouche.

Diversification Opportunities for Compagnie and Groupe Partouche

-0.7

Correlation Coefficient

Compagnie  Groupe Partouche

Excellent diversification

The 3 months correlation between Compagnie and Groupe is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Du Mont Blanc and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche and Compagnie 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 Compagnie Du Mont Blanc are associated (or correlated) with Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Compagnie i.e., Compagnie and Groupe Partouche go up and down completely randomly.

Pair Corralation between Compagnie and Groupe Partouche

Assuming the 90 days trading horizon Compagnie Du Mont Blanc is expected to generate 1.5 times more return on investment than Groupe Partouche. However, Compagnie is 1.5 times more volatile than Groupe Partouche SA. It trades about 0.04 of its potential returns per unit of risk. Groupe Partouche SA is currently generating about -0.1 per unit of risk. If you would invest  13,537  in Compagnie Du Mont Blanc on October 20, 2024 and sell it today you would earn a total of  463.00  from holding Compagnie Du Mont Blanc or generate 3.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Compagnie Du Mont Blanc  vs.  Groupe Partouche SA

Compagnie Du Mont

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Du Mont Blanc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Compagnie is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Groupe Partouche

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Groupe Partouche SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Compagnie and Groupe Partouche

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

The idea behind Compagnie Du Mont Blanc and Groupe Partouche 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.