Correlation Between Groupe Sfpi and Burelle SA

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

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

Diversification Opportunities for Groupe Sfpi and Burelle SA

0.04

Correlation Coefficient

Groupe Sfpi  Burelle SA

Significant diversification

The 3 months correlation between Groupe and Burelle is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Sfpi and Burelle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burelle SA and Groupe Sfpi 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 Groupe Sfpi are associated (or correlated) with Burelle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burelle SA has no effect on the direction of Groupe Sfpi i.e., Groupe Sfpi and Burelle SA go up and down completely randomly.

Pair Corralation between Groupe Sfpi and Burelle SA

Assuming the 90 days trading horizon Groupe Sfpi is expected to generate 4.85 times less return on investment than Burelle SA. But when comparing it to its historical volatility, Groupe Sfpi is 1.12 times less risky than Burelle SA. It trades about 0.02 of its potential returns per unit of risk. Burelle SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  32,200  in Burelle SA on November 28, 2024 and sell it today you would earn a total of  2,900  from holding Burelle SA or generate 9.01% return on investment over 90 days.

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

Groupe Sfpi  vs.  Burelle SA

Groupe Sfpi

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Sfpi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Groupe Sfpi is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Burelle SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Burelle SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Burelle SA may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Groupe Sfpi and Burelle SA

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

The idea behind Groupe Sfpi and Burelle 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.