Correlation Between Groupe Guillin and Linedata Services

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

Diversification Opportunities for Groupe Guillin and Linedata Services

0.59

Correlation Coefficient

Groupe Guillin  Linedata Services

Very weak diversification

The 3 months correlation between Groupe and Linedata is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Groupe Guillin SA and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Groupe Guillin i.e., Groupe Guillin and Linedata Services go up and down completely randomly.

Pair Corralation between Groupe Guillin and Linedata Services

Assuming the 90 days trading horizon Groupe Guillin SA is expected to generate 0.63 times more return on investment than Linedata Services. However, Groupe Guillin SA is 1.59 times less risky than Linedata Services. It trades about 0.21 of its potential returns per unit of risk. Linedata Services SA is currently generating about 0.03 per unit of risk. If you would invest  2,539  in Groupe Guillin SA on April 23, 2025 and sell it today you would earn a total of  396.00  from holding Groupe Guillin SA or generate 15.6% return on investment over 90 days.

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

Groupe Guillin SA  vs.  Linedata Services SA

Groupe Guillin SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Guillin SA are ranked lower than 16 (%) 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.

Linedata Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Linedata Services SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Linedata Services is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Groupe Guillin and Linedata Services

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

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