Correlation Between Seche Environnement and GB Group
Can any of the company-specific risk be diversified away by investing in both Seche Environnement and GB Group 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 GB Group 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 GB Group plc, you can compare the effects of market volatilities on Seche Environnement and GB Group 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 GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seche Environnement and GB Group.
Diversification Opportunities for Seche Environnement and GB Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Seche and GBG is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Seche Environnement SA and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc 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 GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Seche Environnement i.e., Seche Environnement and GB Group go up and down completely randomly.
Pair Corralation between Seche Environnement and GB Group
Assuming the 90 days trading horizon Seche Environnement SA is expected to under-perform the GB Group. But the stock apears to be less risky and, when comparing its historical volatility, Seche Environnement SA is 1.2 times less risky than GB Group. The stock trades about -0.07 of its potential returns per unit of risk. The GB Group plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 33,828 in GB Group plc on August 25, 2024 and sell it today you would earn a total of 3,172 from holding GB Group plc or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Seche Environnement SA vs. GB Group plc
Performance |
| Timeline |
| Seche Environnement |
| GB Group plc |
Seche Environnement and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seche Environnement and GB Group
The main advantage of trading using opposite Seche Environnement and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seche Environnement position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group'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 |
| GB Group vs. CleanTech Lithium plc | GB Group vs. Intermediate Capital Group | GB Group vs. JD Sports Fashion | GB Group vs. Seche Environnement SA |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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