Correlation Between Entreparticuli and Groupe Parot

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

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

Diversification Opportunities for Entreparticuli and Groupe Parot

-0.92

Correlation Coefficient

Entreparticuli  Groupe Parot

Pay attention - limited upside

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

Pair Corralation between Entreparticuli and Groupe Parot

Assuming the 90 days trading horizon Entreparticuli is expected to under-perform the Groupe Parot. In addition to that, Entreparticuli is 6.39 times more volatile than Groupe Parot SA. It trades about -0.07 of its total potential returns per unit of risk. Groupe Parot SA is currently generating about 0.17 per unit of volatility. If you would invest  820.00  in Groupe Parot SA on February 2, 2024 and sell it today you would earn a total of  50.00  from holding Groupe Parot SA or generate 6.1% return on investment over 90 days.

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

Entreparticuli  vs.  Groupe Parot SA

Entreparticuli

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entreparticuli has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Groupe Parot SA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Parot SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Groupe Parot is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Entreparticuli and Groupe Parot

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

The idea behind Entreparticuli and Groupe Parot SA 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.