Correlation Between Prodways Group and Paulic Meunerie

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

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

Diversification Opportunities for Prodways Group and Paulic Meunerie

-0.73

Correlation Coefficient

Prodways Group  Paulic Meunerie

Pay attention - limited upside

The 3 months correlation between Prodways and Paulic is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Prodways Group SA and Paulic Meunerie Sa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paulic Meunerie Sa and Prodways Group 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 Prodways Group SA are associated (or correlated) with Paulic Meunerie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paulic Meunerie Sa has no effect on the direction of Prodways Group i.e., Prodways Group and Paulic Meunerie go up and down completely randomly.

Pair Corralation between Prodways Group and Paulic Meunerie

Assuming the 90 days trading horizon Prodways Group SA is expected to generate 0.9 times more return on investment than Paulic Meunerie. However, Prodways Group SA is 1.11 times less risky than Paulic Meunerie. It trades about 0.07 of its potential returns per unit of risk. Paulic Meunerie Sa is currently generating about -0.12 per unit of risk. If you would invest  58.00  in Prodways Group SA on December 29, 2024 and sell it today you would earn a total of  7.00  from holding Prodways Group SA or generate 12.07% return on investment over 90 days.

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

Prodways Group SA  vs.  Paulic Meunerie Sa

Prodways Group SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Prodways Group SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Prodways Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Paulic Meunerie Sa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Paulic Meunerie Sa has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Prodways Group and Paulic Meunerie

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

The idea behind Prodways Group SA and Paulic Meunerie 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.