Correlation Between Tonnellerie Francois and Robertet

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

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

Diversification Opportunities for Tonnellerie Francois and Robertet

0.25

Correlation Coefficient

Tonnellerie Francois  Robertet

Modest diversification

The 3 months correlation between Tonnellerie and Robertet is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tonnellerie Francois Freres and Robertet SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robertet SA and Tonnellerie Francois 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 Tonnellerie Francois Freres are associated (or correlated) with Robertet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robertet SA has no effect on the direction of Tonnellerie Francois i.e., Tonnellerie Francois and Robertet go up and down completely randomly.

Pair Corralation between Tonnellerie Francois and Robertet

Assuming the 90 days trading horizon Tonnellerie Francois Freres is expected to generate 1.37 times more return on investment than Robertet. However, Tonnellerie Francois is 1.37 times more volatile than Robertet SA. It trades about -0.04 of its potential returns per unit of risk. Robertet SA is currently generating about -0.13 per unit of risk. If you would invest  4,280  in Tonnellerie Francois Freres on April 7, 2024 and sell it today you would lose (80.00) from holding Tonnellerie Francois Freres or give up 1.87% of portfolio value over 90 days.

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

Tonnellerie Francois Freres  vs.  Robertet SA

Tonnellerie Francois

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tonnellerie Francois Freres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Tonnellerie Francois is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Tonnellerie Francois and Robertet

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

The idea behind Tonnellerie Francois Freres and Robertet 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.