Correlation Between OVH Groupe and GECI International

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

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

Diversification Opportunities for OVH Groupe and GECI International

-0.62

Correlation Coefficient

OVH Groupe  GECI International

Excellent diversification

The 3 months correlation between OVH and GECI is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding OVH Groupe SAS and GECI International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GECI International and OVH Groupe 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 OVH Groupe SAS are associated (or correlated) with GECI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GECI International has no effect on the direction of OVH Groupe i.e., OVH Groupe and GECI International go up and down completely randomly.

Pair Corralation between OVH Groupe and GECI International

Assuming the 90 days trading horizon OVH Groupe SAS is expected to under-perform the GECI International. But the stock apears to be less risky and, when comparing its historical volatility, OVH Groupe SAS is 2.53 times less risky than GECI International. The stock trades about -0.09 of its potential returns per unit of risk. The GECI International SA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  269.00  in GECI International SA on December 29, 2024 and sell it today you would earn a total of  82.00  from holding GECI International SA or generate 30.48% return on investment over 90 days.

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

OVH Groupe SAS  vs.  GECI International SA

OVH Groupe SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days OVH Groupe SAS 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 technical 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.

GECI International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GECI International SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GECI International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OVH Groupe and GECI International

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

The idea behind OVH Groupe SAS and GECI International 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.