Correlation Between Viscofan and Profithol

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

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

Diversification Opportunities for Viscofan and Profithol

0.67

Correlation Coefficient

Viscofan  Profithol

Poor diversification

The 3 months correlation between Viscofan and Profithol is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Viscofan and Profithol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profithol SA and Viscofan 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 Viscofan are associated (or correlated) with Profithol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profithol SA has no effect on the direction of Viscofan i.e., Viscofan and Profithol go up and down completely randomly.

Pair Corralation between Viscofan and Profithol

Assuming the 90 days trading horizon Viscofan is expected to under-perform the Profithol. But the stock apears to be less risky and, when comparing its historical volatility, Viscofan is 3.52 times less risky than Profithol. The stock trades about -0.12 of its potential returns per unit of risk. The Profithol SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Profithol SA on April 24, 2025 and sell it today you would lose (3.00) from holding Profithol SA or give up 6.38% of portfolio value over 90 days.

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

Viscofan  vs.  Profithol SA

Viscofan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viscofan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Profithol SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profithol SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Profithol is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Viscofan and Profithol

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

The idea behind Viscofan and Profithol 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.