Correlation Between CBO Territoria and Groupe CRIT

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

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

Diversification Opportunities for CBO Territoria and Groupe CRIT

0.76

Correlation Coefficient

CBO Territoria  Groupe CRIT

Poor diversification

The 3 months correlation between CBO and Groupe is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CBO Territoria SA and Groupe CRIT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe CRIT SA and CBO Territoria 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 CBO Territoria SA are associated (or correlated) with Groupe CRIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe CRIT SA has no effect on the direction of CBO Territoria i.e., CBO Territoria and Groupe CRIT go up and down completely randomly.

Pair Corralation between CBO Territoria and Groupe CRIT

Assuming the 90 days trading horizon CBO Territoria is expected to generate 1.11 times less return on investment than Groupe CRIT. But when comparing it to its historical volatility, CBO Territoria SA is 2.16 times less risky than Groupe CRIT. It trades about 0.17 of its potential returns per unit of risk. Groupe CRIT SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,010  in Groupe CRIT SA on April 24, 2025 and sell it today you would earn a total of  350.00  from holding Groupe CRIT SA or generate 5.82% return on investment over 90 days.

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

CBO Territoria SA  vs.  Groupe CRIT SA

CBO Territoria SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CBO Territoria SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CBO Territoria is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Groupe CRIT SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe CRIT SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Groupe CRIT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CBO Territoria and Groupe CRIT

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

The idea behind CBO Territoria SA and Groupe CRIT 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.