Correlation Between Groupe Guillin and Compagnie Industrielle

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

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

Diversification Opportunities for Groupe Guillin and Compagnie Industrielle

0.75

Correlation Coefficient

Groupe Guillin  Compagnie Industrielle

Poor diversification

The 3 months correlation between Groupe and Compagnie is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Compagnie Industrielle et in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Industrielle and Groupe Guillin 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 Groupe Guillin SA are associated (or correlated) with Compagnie Industrielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Industrielle has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Compagnie Industrielle go up and down completely randomly.

Pair Corralation between Groupe Guillin and Compagnie Industrielle

Assuming the 90 days trading horizon Groupe Guillin is expected to generate 3.63 times less return on investment than Compagnie Industrielle. But when comparing it to its historical volatility, Groupe Guillin SA is 5.74 times less risky than Compagnie Industrielle. It trades about 0.19 of its potential returns per unit of risk. Compagnie Industrielle et is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5,038  in Compagnie Industrielle et on April 21, 2025 and sell it today you would earn a total of  2,162  from holding Compagnie Industrielle et or generate 42.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Groupe Guillin SA  vs.  Compagnie Industrielle et

Groupe Guillin SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Guillin SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groupe Guillin reported solid returns over the last few months and may actually be approaching a breakup point.

Compagnie Industrielle

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Industrielle et are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Compagnie Industrielle sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Groupe Guillin and Compagnie Industrielle

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

The idea behind Groupe Guillin SA and Compagnie Industrielle et 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.