Correlation Between Groupe CRIT and Sword Group

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

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

Diversification Opportunities for Groupe CRIT and Sword Group

0.82

Correlation Coefficient

Groupe CRIT  Sword Group

Very poor diversification

The 3 months correlation between Groupe and Sword is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Groupe CRIT SA and Sword Group SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sword Group SE and Groupe CRIT 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 CRIT SA are associated (or correlated) with Sword Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sword Group SE has no effect on the direction of Groupe CRIT i.e., Groupe CRIT and Sword Group go up and down completely randomly.

Pair Corralation between Groupe CRIT and Sword Group

Assuming the 90 days trading horizon Groupe CRIT is expected to generate 2.69 times less return on investment than Sword Group. But when comparing it to its historical volatility, Groupe CRIT SA is 1.5 times less risky than Sword Group. It trades about 0.12 of its potential returns per unit of risk. Sword Group SE is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,023  in Sword Group SE on April 23, 2025 and sell it today you would earn a total of  697.00  from holding Sword Group SE or generate 23.06% return on investment over 90 days.

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

Groupe CRIT SA  vs.  Sword Group SE

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 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe CRIT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Sword Group SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sword Group SE are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sword Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Groupe CRIT and Sword Group

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

The idea behind Groupe CRIT SA and Sword Group SE 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.

Check out your portfolio center.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.