Correlation Between Piscines Desjoyaux and Groupe Sfpi

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

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

Diversification Opportunities for Piscines Desjoyaux and Groupe Sfpi

-0.68

Correlation Coefficient

Piscines Desjoyaux  Groupe Sfpi

Excellent diversification

The 3 months correlation between Piscines and Groupe is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Piscines Desjoyaux SA and Groupe Sfpi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Sfpi and Piscines Desjoyaux 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 Piscines Desjoyaux 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 Piscines Desjoyaux i.e., Piscines Desjoyaux and Groupe Sfpi go up and down completely randomly.

Pair Corralation between Piscines Desjoyaux and Groupe Sfpi

Assuming the 90 days trading horizon Piscines Desjoyaux SA is expected to under-perform the Groupe Sfpi. But the stock apears to be less risky and, when comparing its historical volatility, Piscines Desjoyaux SA is 1.43 times less risky than Groupe Sfpi. The stock trades about -0.07 of its potential returns per unit of risk. The Groupe Sfpi is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  217.00  in Groupe Sfpi on September 1, 2024 and sell it today you would lose (24.00) from holding Groupe Sfpi or give up 11.06% of portfolio value over 90 days.

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

Piscines Desjoyaux SA  vs.  Groupe Sfpi

Piscines Desjoyaux

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Piscines Desjoyaux SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Piscines Desjoyaux is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Groupe Sfpi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Piscines Desjoyaux and Groupe Sfpi

The main advantage of trading using opposite Piscines Desjoyaux and Groupe Sfpi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piscines Desjoyaux 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 Piscines Desjoyaux 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.