Correlation Between Thermador Groupe and Derichebourg

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

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

Diversification Opportunities for Thermador Groupe and Derichebourg

0.63

Correlation Coefficient

Thermador Groupe  Derichebourg

Poor diversification

The 3 months correlation between Thermador and Derichebourg is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Derichebourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derichebourg and Thermador Groupe 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 Thermador Groupe SA are associated (or correlated) with Derichebourg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derichebourg has no effect on the direction of Thermador Groupe i.e., Thermador Groupe and Derichebourg go up and down completely randomly.

Pair Corralation between Thermador Groupe and Derichebourg

Assuming the 90 days trading horizon Thermador Groupe SA is expected to under-perform the Derichebourg. But the stock apears to be less risky and, when comparing its historical volatility, Thermador Groupe SA is 1.71 times less risky than Derichebourg. The stock trades about -0.09 of its potential returns per unit of risk. The Derichebourg is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  521.00  in Derichebourg on September 17, 2024 and sell it today you would lose (9.00) from holding Derichebourg or give up 1.73% of portfolio value over 90 days.

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

Thermador Groupe SA  vs.  Derichebourg

Thermador Groupe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thermador Groupe 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.

Derichebourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Derichebourg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Derichebourg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Thermador Groupe and Derichebourg

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

The idea behind Thermador Groupe SA and Derichebourg 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.