Correlation Between Robertet and Compagnie

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

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

Diversification Opportunities for Robertet and Compagnie

0.3

Correlation Coefficient

Robertet  Compagnie

Weak diversification

The 3 months correlation between Robertet and Compagnie is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Robertet SA and Compagnie de lOdet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie de lOdet and Robertet 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 Robertet SA are associated (or correlated) with Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie de lOdet has no effect on the direction of Robertet i.e., Robertet and Compagnie go up and down completely randomly.

Pair Corralation between Robertet and Compagnie

Assuming the 90 days trading horizon Robertet SA is expected to generate 0.99 times more return on investment than Compagnie. However, Robertet SA is 1.01 times less risky than Compagnie. It trades about -0.17 of its potential returns per unit of risk. Compagnie de lOdet is currently generating about -0.47 per unit of risk. If you would invest  85,907  in Robertet SA on April 4, 2024 and sell it today you would lose (3,807) from holding Robertet SA or give up 4.43% of portfolio value over 90 days.

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

Robertet SA  vs.  Compagnie de lOdet

Robertet SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Robertet SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Robertet is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Compagnie de lOdet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compagnie de lOdet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Robertet and Compagnie

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

The idea behind Robertet SA and Compagnie de lOdet 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.