Correlation Between Compagnie and Carrefour

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

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

Diversification Opportunities for Compagnie and Carrefour

-0.63

Correlation Coefficient

Compagnie  Carrefour

Excellent diversification

The 3 months correlation between Compagnie and Carrefour is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Du Mont Blanc and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA and Compagnie 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 Compagnie Du Mont Blanc are associated (or correlated) with Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of Compagnie i.e., Compagnie and Carrefour go up and down completely randomly.

Pair Corralation between Compagnie and Carrefour

Assuming the 90 days trading horizon Compagnie Du Mont Blanc is expected to generate 1.21 times more return on investment than Carrefour. However, Compagnie is 1.21 times more volatile than Carrefour SA. It trades about 0.18 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.04 per unit of risk. If you would invest  16,600  in Compagnie Du Mont Blanc on April 24, 2025 and sell it today you would earn a total of  3,300  from holding Compagnie Du Mont Blanc or generate 19.88% return on investment over 90 days.

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

Compagnie Du Mont Blanc  vs.  Carrefour SA

Compagnie Du Mont

Risk-Adjusted Performance

Good

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

Carrefour SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carrefour SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Carrefour is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Compagnie and Carrefour

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

The idea behind Compagnie Du Mont Blanc and Carrefour 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.