Correlation Between Eurazeo and Robertet

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

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

Diversification Opportunities for Eurazeo and Robertet

-0.74

Correlation Coefficient

Eurazeo  Robertet

Pay attention - limited upside

The 3 months correlation between Eurazeo and Robertet is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Eurazeo and Robertet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robertet SA and Eurazeo 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 Eurazeo are associated (or correlated) with Robertet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robertet SA has no effect on the direction of Eurazeo i.e., Eurazeo and Robertet go up and down completely randomly.

Pair Corralation between Eurazeo and Robertet

Assuming the 90 days horizon Eurazeo is expected to generate 1.37 times more return on investment than Robertet. However, Eurazeo is 1.37 times more volatile than Robertet SA. It trades about 0.18 of its potential returns per unit of risk. Robertet SA is currently generating about -0.11 per unit of risk. If you would invest  6,955  in Eurazeo on November 29, 2024 and sell it today you would earn a total of  975.00  from holding Eurazeo or generate 14.02% return on investment over 90 days.

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

Eurazeo  vs.  Robertet SA

Eurazeo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eurazeo are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eurazeo sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Eurazeo and Robertet

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

The idea behind Eurazeo and Robertet 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.