Correlation Between Groupe Partouche and Gecina SA

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

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

Diversification Opportunities for Groupe Partouche and Gecina SA

0.89

Correlation Coefficient

Groupe Partouche  Gecina SA

Very poor diversification

The 3 months correlation between Groupe and Gecina is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Partouche SA and Gecina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gecina SA and Groupe Partouche 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 Groupe Partouche SA are associated (or correlated) with Gecina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gecina SA has no effect on the direction of Groupe Partouche i.e., Groupe Partouche and Gecina SA go up and down completely randomly.

Pair Corralation between Groupe Partouche and Gecina SA

Assuming the 90 days trading horizon Groupe Partouche SA is expected to generate 0.88 times more return on investment than Gecina SA. However, Groupe Partouche SA is 1.14 times less risky than Gecina SA. It trades about 0.02 of its potential returns per unit of risk. Gecina SA is currently generating about -0.12 per unit of risk. If you would invest  3,870  in Groupe Partouche SA on October 9, 2024 and sell it today you would earn a total of  10.00  from holding Groupe Partouche SA or generate 0.26% return on investment over 90 days.

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

Groupe Partouche SA  vs.  Gecina SA

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.

Gecina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gecina SA 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 fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Groupe Partouche and Gecina SA

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

The idea behind Groupe Partouche SA and Gecina 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.