Correlation Between Robertet and Methanor

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

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

Diversification Opportunities for Robertet and Methanor

0.78

Correlation Coefficient

Robertet  Methanor

Poor diversification

The 3 months correlation between Robertet and Methanor is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Robertet SA and Methanor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methanor 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 Methanor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methanor has no effect on the direction of Robertet i.e., Robertet and Methanor go up and down completely randomly.

Pair Corralation between Robertet and Methanor

Assuming the 90 days trading horizon Robertet SA is expected to generate 0.5 times more return on investment than Methanor. However, Robertet SA is 2.01 times less risky than Methanor. It trades about -0.16 of its potential returns per unit of risk. Methanor is currently generating about -0.08 per unit of risk. If you would invest  91,900  in Robertet SA on September 15, 2024 and sell it today you would lose (4,700) from holding Robertet SA or give up 5.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Robertet SA  vs.  Methanor

Robertet SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robertet 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.

Methanor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Methanor 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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Robertet and Methanor

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

The idea behind Robertet SA and Methanor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.