Correlation Between Tonnellerie Francois and SA Catana

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

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

Diversification Opportunities for Tonnellerie Francois and SA Catana

-0.38

Correlation Coefficient

Tonnellerie Francois  SA Catana

Very good diversification

The 3 months correlation between Tonnellerie and CATG is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tonnellerie Francois Freres and SA Catana Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Catana Group and Tonnellerie Francois 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 Tonnellerie Francois Freres are associated (or correlated) with SA Catana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Catana Group has no effect on the direction of Tonnellerie Francois i.e., Tonnellerie Francois and SA Catana go up and down completely randomly.

Pair Corralation between Tonnellerie Francois and SA Catana

Assuming the 90 days trading horizon Tonnellerie Francois Freres is expected to under-perform the SA Catana. But the stock apears to be less risky and, when comparing its historical volatility, Tonnellerie Francois Freres is 1.21 times less risky than SA Catana. The stock trades about -0.09 of its potential returns per unit of risk. The SA Catana Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  444.00  in SA Catana Group on December 1, 2024 and sell it today you would earn a total of  61.00  from holding SA Catana Group or generate 13.74% return on investment over 90 days.

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

Tonnellerie Francois Freres  vs.  SA Catana Group

Tonnellerie Francois

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tonnellerie Francois Freres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

SA Catana Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SA Catana Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SA Catana sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tonnellerie Francois and SA Catana

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

The idea behind Tonnellerie Francois Freres and SA Catana Group 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.