Correlation Between Guandao Puer and Financiere Moncey

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

By analyzing existing cross correlation between Guandao Puer Investment and Financiere Moncey SA, you can compare the effects of market volatilities on Guandao Puer and Financiere Moncey 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 Guandao Puer with a short position of Financiere Moncey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guandao Puer and Financiere Moncey.

Diversification Opportunities for Guandao Puer and Financiere Moncey

0.0

Correlation Coefficient

Guandao Puer  Financiere Moncey

Pay attention - limited upside

The 3 months correlation between Guandao and Financiere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guandao Puer Investment and Financiere Moncey SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiere Moncey and Guandao Puer 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 Guandao Puer Investment are associated (or correlated) with Financiere Moncey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiere Moncey has no effect on the direction of Guandao Puer i.e., Guandao Puer and Financiere Moncey go up and down completely randomly.

Pair Corralation between Guandao Puer and Financiere Moncey

If you would invest  6,900  in Financiere Moncey SA on October 4, 2024 and sell it today you would earn a total of  6,982  from holding Financiere Moncey SA or generate 101.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Guandao Puer Investment  vs.  Financiere Moncey SA

Guandao Puer Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guandao Puer Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Guandao Puer is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Financiere Moncey

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with Guandao Puer and Financiere Moncey

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

The idea behind Guandao Puer Investment and Financiere Moncey 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 CEOs Directory module to screen CEOs from public companies around the world.