Correlation Between Vanguard Funds and Groupama Entreprises

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

By analyzing existing cross correlation between Vanguard Funds Public and Groupama Entreprises N, you can compare the effects of market volatilities on Vanguard Funds and Groupama Entreprises 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 Vanguard Funds with a short position of Groupama Entreprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Funds and Groupama Entreprises.

Diversification Opportunities for Vanguard Funds and Groupama Entreprises

0.92

Correlation Coefficient

Vanguard Funds  Groupama Entreprises

Almost no diversification

The 3 months correlation between Vanguard and Groupama is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Funds Public and Groupama Entreprises N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupama Entreprises and Vanguard Funds 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 Vanguard Funds Public are associated (or correlated) with Groupama Entreprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupama Entreprises has no effect on the direction of Vanguard Funds i.e., Vanguard Funds and Groupama Entreprises go up and down completely randomly.

Pair Corralation between Vanguard Funds and Groupama Entreprises

Assuming the 90 days trading horizon Vanguard Funds Public is expected to generate 57.17 times more return on investment than Groupama Entreprises. However, Vanguard Funds is 57.17 times more volatile than Groupama Entreprises N. It trades about 0.1 of its potential returns per unit of risk. Groupama Entreprises N is currently generating about 0.99 per unit of risk. If you would invest  7,313  in Vanguard Funds Public on October 5, 2024 and sell it today you would earn a total of  3,437  from holding Vanguard Funds Public or generate 47.0% return on investment over 90 days.

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

Vanguard Funds Public  vs.  Groupama Entreprises N

Vanguard Funds Public

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Vanguard Funds Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly unsteady basic indicators, Vanguard Funds may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Groupama Entreprises

Risk-Adjusted Performance

0 of 100

Market Crasher

Over the last 90 days Groupama Entreprises N has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Groupama Entreprises is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Funds and Groupama Entreprises

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

The idea behind Vanguard Funds Public and Groupama Entreprises N 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.