Correlation Between Robertet and Groupe Guillin

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

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

Diversification Opportunities for Robertet and Groupe Guillin

0.52

Correlation Coefficient

Robertet  Groupe Guillin

Very weak diversification

The 3 months correlation between Robertet and Groupe is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Robertet SA and Groupe Guillin SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Guillin SA and Robertet 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 Robertet SA are associated (or correlated) with Groupe Guillin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Guillin SA has no effect on the direction of Robertet i.e., Robertet and Groupe Guillin go up and down completely randomly.

Pair Corralation between Robertet and Groupe Guillin

Assuming the 90 days trading horizon Robertet SA is expected to generate 0.64 times more return on investment than Groupe Guillin. However, Robertet SA is 1.57 times less risky than Groupe Guillin. It trades about -0.05 of its potential returns per unit of risk. Groupe Guillin SA is currently generating about -0.04 per unit of risk. If you would invest  85,500  in Robertet SA on December 30, 2024 and sell it today you would lose (2,900) from holding Robertet SA or give up 3.39% of portfolio value over 90 days.

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

Robertet SA  vs.  Groupe Guillin SA

Robertet SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Robertet SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Robertet is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Groupe Guillin SA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Robertet and Groupe Guillin

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

The idea behind Robertet SA and Groupe Guillin 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.