Correlation Between Placoplatre and Stradim Espace

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

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

Diversification Opportunities for Placoplatre and Stradim Espace

-0.74

Correlation Coefficient

Placoplatre  Stradim Espace

Pay attention - limited upside

The 3 months correlation between Placoplatre and Stradim is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Placoplatre SA and Stradim Espace Finances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stradim Espace Finances and Placoplatre 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 Placoplatre SA are associated (or correlated) with Stradim Espace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stradim Espace Finances has no effect on the direction of Placoplatre i.e., Placoplatre and Stradim Espace go up and down completely randomly.

Pair Corralation between Placoplatre and Stradim Espace

Assuming the 90 days trading horizon Placoplatre SA is expected to under-perform the Stradim Espace. But the stock apears to be less risky and, when comparing its historical volatility, Placoplatre SA is 3.98 times less risky than Stradim Espace. The stock trades about -0.06 of its potential returns per unit of risk. The Stradim Espace Finances is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  430.00  in Stradim Espace Finances on April 24, 2025 and sell it today you would earn a total of  215.00  from holding Stradim Espace Finances or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Placoplatre SA  vs.  Stradim Espace Finances

Placoplatre SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Placoplatre SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Stradim Espace Finances

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stradim Espace Finances are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Stradim Espace reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Placoplatre and Stradim Espace

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

The idea behind Placoplatre SA and Stradim Espace Finances 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.