Correlation Between Prodways Group and Groupe Sfpi

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

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

Diversification Opportunities for Prodways Group and Groupe Sfpi

0.32

Correlation Coefficient

Prodways Group  Groupe Sfpi

Weak diversification

The 3 months correlation between Prodways and Groupe is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Prodways Group SA and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi and Prodways Group 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 Prodways Group SA are associated (or correlated) with Groupe Sfpi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Sfpi has no effect on the direction of Prodways Group i.e., Prodways Group and Groupe Sfpi go up and down completely randomly.

Pair Corralation between Prodways Group and Groupe Sfpi

Assuming the 90 days trading horizon Prodways Group SA is expected to generate 2.16 times more return on investment than Groupe Sfpi. However, Prodways Group is 2.16 times more volatile than Groupe Sfpi. It trades about 0.29 of its potential returns per unit of risk. Groupe Sfpi is currently generating about 0.17 per unit of risk. If you would invest  57.00  in Prodways Group SA on April 24, 2025 and sell it today you would earn a total of  27.00  from holding Prodways Group SA or generate 47.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.94%
Values	Daily Returns

Prodways Group SA  vs.  Groupe Sfpi

Prodways Group SA

Risk-Adjusted Performance

Solid

Over the last 90 days Prodways Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak technical and fundamental indicators, Prodways Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Groupe Sfpi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Groupe Sfpi are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Groupe Sfpi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Prodways Group and Groupe Sfpi

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

The idea behind Prodways Group SA and Groupe Sfpi 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.