Correlation Between Thermador Groupe and Sergeferrari

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

Diversification Opportunities for Thermador Groupe and Sergeferrari

0.29

Correlation Coefficient

Thermador Groupe  Sergeferrari

Modest diversification

The 3 months correlation between Thermador and Sergeferrari is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Thermador Groupe SA and Sergeferrari G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sergeferrari G 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 Sergeferrari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sergeferrari G has no effect on the direction of Thermador Groupe i.e., Thermador Groupe and Sergeferrari go up and down completely randomly.

Pair Corralation between Thermador Groupe and Sergeferrari

Assuming the 90 days trading horizon Thermador Groupe SA is expected to generate 0.59 times more return on investment than Sergeferrari. However, Thermador Groupe SA is 1.69 times less risky than Sergeferrari. It trades about -0.02 of its potential returns per unit of risk. Sergeferrari G is currently generating about -0.05 per unit of risk. If you would invest  8,824  in Thermador Groupe SA on October 22, 2024 and sell it today you would lose (1,924) from holding Thermador Groupe SA or give up 21.8% of portfolio value over 90 days.

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

Thermador Groupe SA  vs.  Sergeferrari G

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 somewhat strong basic indicators, Thermador Groupe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sergeferrari G

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sergeferrari G are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sergeferrari may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Thermador Groupe and Sergeferrari

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

The idea behind Thermador Groupe SA and Sergeferrari G 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.