Correlation Between Seche Environnement and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and CVR Energy 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 Seche Environnement and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seche Environnement SA and CVR Energy, you can compare the effects of market volatilities on Seche Environnement and CVR Energy 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 Seche Environnement with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and CVR Energy.
Diversification Opportunities for Seche Environnement and CVR Energy
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Seche and CVR is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Seche Environnement 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 Seche Environnement SA are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Seche Environnement i.e., Seche Environnement and CVR Energy go up and down completely randomly.
Pair Corralation between Seche Environnement and CVR Energy
Assuming the 90 days trading horizon Seche Environnement SA is expected to generate 0.66 times more return on investment than CVR Energy. However, Seche Environnement SA is 1.52 times less risky than CVR Energy. It trades about -0.01 of its potential returns per unit of risk. CVR Energy is currently generating about -0.04 per unit of risk. If you would invest 9,355 in Seche Environnement SA on August 25, 2024 and sell it today you would lose (1,015) from holding Seche Environnement SA or give up 10.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.0% |
| Values | Daily Returns |
Seche Environnement SA vs. CVR Energy
Performance |
| Timeline |
| Seche Environnement |
| CVR Energy |
Seche Environnement and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and CVR Energy
The main advantage of trading using opposite Seche Environnement and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Seche Environnement vs. Broadridge Financial Solutions | Seche Environnement vs. Nordic Semiconductor ASA | Seche Environnement vs. CleanTech Lithium plc | Seche Environnement vs. BE Semiconductor Industries |
| CVR Energy vs. Seche Environnement SA | CVR Energy vs. Baker Steel Resources | CVR Energy vs. Dolly Varden Silver | CVR Energy vs. Caledonia Mining |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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