Correlation Between Robertet and Grard Perrier

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

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

Diversification Opportunities for Robertet and Grard Perrier

0.2

Correlation Coefficient

Robertet  Grard Perrier

Modest diversification

The 3 months correlation between Robertet and Grard is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Robertet SA and Grard Perrier Industrie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grard Perrier Industrie 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 Grard Perrier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grard Perrier Industrie has no effect on the direction of Robertet i.e., Robertet and Grard Perrier go up and down completely randomly.

Pair Corralation between Robertet and Grard Perrier

Assuming the 90 days trading horizon Robertet SA is expected to generate 0.77 times more return on investment than Grard Perrier. However, Robertet SA is 1.29 times less risky than Grard Perrier. It trades about -0.05 of its potential returns per unit of risk. Grard Perrier Industrie is currently generating about -0.1 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Robertet SA  vs.  Grard Perrier Industrie

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.

Grard Perrier Industrie

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grard Perrier Industrie 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.

Pair Trading with Robertet and Grard Perrier

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

The idea behind Robertet SA and Grard Perrier Industrie 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.