Correlation Between Groupimo and Adomos SA

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

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

Diversification Opportunities for Groupimo and Adomos SA

-0.34

Correlation Coefficient

Groupimo  Adomos SA

Very good diversification

The 3 months correlation between Groupimo and Adomos is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Groupimo SA and Adomos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adomos SA and Groupimo 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 Groupimo SA are associated (or correlated) with Adomos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adomos SA has no effect on the direction of Groupimo i.e., Groupimo and Adomos SA go up and down completely randomly.

Pair Corralation between Groupimo and Adomos SA

Assuming the 90 days trading horizon Groupimo SA is expected to generate 2.06 times more return on investment than Adomos SA. However, Groupimo is 2.06 times more volatile than Adomos SA. It trades about 0.11 of its potential returns per unit of risk. Adomos SA is currently generating about -0.34 per unit of risk. If you would invest  20.00  in Groupimo SA on April 23, 2025 and sell it today you would earn a total of  17.00  from holding Groupimo SA or generate 85.0% return on investment over 90 days.

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

Groupimo SA  vs.  Adomos SA

Groupimo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupimo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Groupimo reported solid returns over the last few months and may actually be approaching a breakup point.

Adomos SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adomos SA 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 August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Groupimo and Adomos SA

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

The idea behind Groupimo SA and Adomos 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 Transaction History module to view history of all your transactions and understand their impact on performance.