Correlation Between Thermador Groupe and Malteries Franco

Can any of the company-specific risk be diversified away by investing in both Thermador Groupe and Malteries Franco 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 Malteries Franco 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 Malteries Franco Belges Socit, you can compare the effects of market volatilities on Thermador Groupe and Malteries Franco 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 Malteries Franco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermador Groupe and Malteries Franco.

Diversification Opportunities for Thermador Groupe and Malteries Franco

-0.68

Correlation Coefficient

Thermador Groupe  Malteries Franco

Excellent diversification

The 3 months correlation between Thermador and Malteries is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Malteries Franco Belges Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malteries Franco Belges 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 Malteries Franco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malteries Franco Belges has no effect on the direction of Thermador Groupe i.e., Thermador Groupe and Malteries Franco go up and down completely randomly.

Pair Corralation between Thermador Groupe and Malteries Franco

Assuming the 90 days trading horizon Thermador Groupe SA is expected to under-perform the Malteries Franco. In addition to that, Thermador Groupe is 1.04 times more volatile than Malteries Franco Belges Socit. It trades about -0.09 of its total potential returns per unit of risk. Malteries Franco Belges Socit is currently generating about 0.16 per unit of volatility. If you would invest  63,500  in Malteries Franco Belges Socit on September 5, 2024 and sell it today you would earn a total of  9,500  from holding Malteries Franco Belges Socit or generate 14.96% return on investment over 90 days.

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

Thermador Groupe SA  vs.  Malteries Franco Belges Socit

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.

Malteries Franco Belges

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Malteries Franco Belges Socit are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Malteries Franco sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thermador Groupe and Malteries Franco

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

The idea behind Thermador Groupe SA and Malteries Franco Belges Socit 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.