Correlation Between Seche Environnement and Advanced Medical
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and Advanced Medical 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 Advanced Medical 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 Advanced Medical Solutions, you can compare the effects of market volatilities on Seche Environnement and Advanced Medical 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 Advanced Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and Advanced Medical.
Diversification Opportunities for Seche Environnement and Advanced Medical
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seche and Advanced is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Seche Environnement i.e., Seche Environnement and Advanced Medical go up and down completely randomly.
Pair Corralation between Seche Environnement and Advanced Medical
Assuming the 90 days trading horizon Seche Environnement SA is expected to under-perform the Advanced Medical. But the stock apears to be less risky and, when comparing its historical volatility, Seche Environnement SA is 1.22 times less risky than Advanced Medical. The stock trades about -0.07 of its potential returns per unit of risk. The Advanced Medical Solutions is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 21,950 in Advanced Medical Solutions on November 6, 2024 and sell it today you would lose (1,850) from holding Advanced Medical Solutions or give up 8.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seche Environnement SA vs. Advanced Medical Solutions
Performance |
| Timeline |
| Seche Environnement |
| Advanced Medical Sol |
Seche Environnement and Advanced Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and Advanced Medical
The main advantage of trading using opposite Seche Environnement and Advanced Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, Advanced Medical 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 Advanced Medical will offset losses from the drop in Advanced Medical's long position.| Seche Environnement vs. Telecom Italia SpA | Seche Environnement vs. Iron Mountain | Seche Environnement vs. Geely Automobile Holdings | Seche Environnement vs. Zoom Video Communications |
| Advanced Medical vs. Learning Technologies Group | Advanced Medical vs. Clean Power Hydrogen | Advanced Medical vs. Vitec Software Group | Advanced Medical vs. CleanTech Lithium plc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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